Land recorded as agriculture land in revenue record – Not entitled to compensation at rate of agriculture land. : Allahabad High Court

eLegalix Allahabad High Court Judgment Information Systempraying for setting aside the order dated 06.08.2020 passed by the District Judge Shahjahanpur in Arbitration Case No.116 under Section 34 of the Act 1996 . 3. The brief facts of the case are that the appellant in the exercise of power under Section 3 Aof the National Highway Act 1956issued notification dated 16.11.2009 with respect to the lands situated in the number of villages for the widening of NH 24 to four lanes. By the said notification Gata No.193 area 0.1260 hectaresituated in village Maujampur Tehsil Sadar district Shahjahanpur owned by respondent no.1 was also acquired. 4. The declaration under Section 3 D of the Act 1956 in respect of the land in question was issued on 08.10.2010 The competent authority while disposing of the objection of respondent held that since land in question is recorded as agriculture land therefore compensation be calculated and paid as per circle rates applicable to agriculture land Accordingly it calculated compensation based on circle rates applicable to agriculture land and declared the award on 05.10.2012 under Section 3 G of the Act 1956. 5. Feeling aggrieved by the award respondent no.1 preferred application under Section 3 Gof the Act 1956 for referring the matter to the Arbitrator. Accordingly the application of respondent no.1 was referred to the Sole Arbitrator Collector Shahjahanpur for deciding the claim of respondent no.1. 6. 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. Road Side Land Control Act 1942 therefore the competent authority rightly computed the compensation treating the land to be agriculture land Accordingly it held that there is no illegality or infirmity in the award passed by the competent authority. 7. Feeling aggrieved by the order of the Sole Arbitrator Collector Shahjahanpur in Arbitration Case No.212 the respondent no.1 preferred application under Section 34 of the Act 1996 before the District Judge Shahjahanpur which was numbered as 116. The District Judge Shahjahanpur by order dated 06.08.2020 rejected the objection of the appellant against the application of the respondent under Section 34 of the Act 1996. It set aside the award dated 30.06.2016 passed in Arbitration Case No.116 and directed for payment of compensation treating the land to be commercial land. 8. 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 award of the Arbitrator is against the public policy and principles of natural justice. Accordingly it found no merit in the objection of the appellant and rejected the same. Thereafter the District Judge proceeded to consider the issue as to whether respondent no.1 is entitled to compensation on the basis of agriculture land or commercial land. After examining the evidence led by respondent no.1 the District Judge found that the land in question was commercial land and accordingly it directed for payment of compensation of the land in question on the basis of the commercial rate applicable on the date of notification under Section 3 A of the Act 1956. 9. Challenging the order dated 06.08.2020 passed by the District Judge Shahjahanpur learned counsel for the appellant has 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 is beyond the scope of Section 34 of the Act 1996. He submits 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. He submits that in the case on hand 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 empowering the courts to invoke its jurisdiction is present in the present case Thus he submits that the order of the District Judge Shahjahanpur is without jurisdiction and deserves to be set aside 10. He further submits that it is established from the evidence on record that land in question is recorded as agriculture 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 submits that the District Judge has 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 on the basis of commercial land. Thus the submission is that the impugned order is per se illegal and not sustainable in law. 11. I have heard learned counsel for the appellant and perused the record. 12. Before adverting to the first argument of learned counsel for the appellant in respect of the scope of Section 34 of the Act 1996 it would be appropriate to reproduce Section 34 of the Act 1996: 34. Application for setting aside arbitral award. Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub sectionand sub sectionAn arbitral award may be set aside by the Court only if a) the party making the application furnishes proof that i) a party was under some incapacity or ii) the arbitration agreement is not valid under the law to which the parties have subjected it or failing any indication thereon under the law for the time being in force or iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case or iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that if the decisions on matters submitted to arbitration can be separated from those not so submitted only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside or v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate or failing such agreement was not in accordance with this Part or b) the Court finds that i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force ii) the arbitral award is in conflict with the public policy of India. Explanation 1. For the avoidance of any doubt it is clarified that an award is in conflict with the public policy of India only if i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81 or ii) it is in contravention with the fundamental policy of Indian law or iii) it is in conflict with the most basic notions of morality or justice.] Explanation 2. For the avoidance of doubt the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.] 2A) An arbitral award arising out of arbitrations other than international commercial arbitrations may also be set aside by the Court if the Court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.] 3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or if a request had been made under section 33 from the date on which that request had been disposed of by the arbitral tribunal: Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days but not 4) On receipt of an application under sub sectionthe Court may where it is appropriate and it is so requested by a party adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award. 5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said 6) An application under this section shall be disposed of expeditiously and in any event within a period of one year from the date on which the notice referred to in sub sectionis served upon the other party.]" 13. At this point it would be appropriate to refer to few judgments of the Apex Court to appreciate the scope of Section 34 of the Act 1996. 14. In Dyna Technologies Private Limited Vs. Crompton Greaves Limited20 SCC 1 the Apex Court has held that Section 34 of the Act 1996 limits challenge to the award only on the grounds stipulated therein. Paragraphs 24 25 of the said judgment are being extracted herein below: 24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 25. Moreover umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act." 15. The Apex Court in the case of Swan Gold Mining Limited Vs. Hindustan Copper Limited5 SCC 739 held that the Court shall not ordinarily substitute its interpretation for that of the Arbitrator. Paragraph 12 of the said judgment is being reproduced hereinbelow: 12. It is equally well settled that the arbitrator appointed by the parties is the final judge of the facts. The finding of facts recorded by him cannot be interfered with on the ground that the terms of the contract were not correctly interpreted by him. 16. The Apex Court in the case of M s Navodaya Mass Entertainment Limited Vs. M s. J.M. Combines5 SCC 698 while considering the scope of Section 34 of the Act 1996 reiterated that the scope of interference of the court is very limited. Court is not vested with the power to reappraise the material on record and substitute the view of Arbitrator by its view. Paragraph 8 of the said judgment is being reproduced hereinbelow: 8. In our opinion the scope of interference of the court is very limited. The court would not be justified in reappraising the material on record and substituting its own view in place of the arbitrator s view. Where there is an error apparent on the face of the record or the arbitrator has not followed the statutory legal position then and then only it would be justified in interfering with the award published by the arbitrator. Once the arbitrator has applied his mind to the matter before him the court cannot reappraise the matter as if it were an appeal and even if two views are possible the view taken by the arbitrator would prevail." 17. In the case of MMTC Limited Vs. Vedanta Limited4 SCC 163 the Apex Court held that court does not sit in appeal over arbitral award while considering the application 34 of the Act 1996. Paragraph 11 of the said judgment is being reproduced hereinbelow: 11. As far as Section 34 is concerned the position is well settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015 a violation of Indian public policy in turn includes a violation of the fundamental policy of Indian law a violation of the interest of India conflict with justice or morality and the existence of patent illegality in the arbitral award. Additionally the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents adopting a judicial approach compliance with the principles of natural justice and Wednesbury reasonableness. Furthermore "patent illegality" itself has been held to mean contravention of the substantive law of India contravention of the 1996 Act and contravention of the terms of the 18. The Apex Court in the aforesaid judgments while explaining the scope of Section 34 of the Act 1996 consistently held that the court does not act as the court of appeal in dealing with the arbitral award and should be slow in interfering with the arbitration award. It is also held in the aforesaid judgments that if two views are possible on an issue and one adopted by the arbitrator is possible then the court should not substitute its view by the view of the Arbitrator. Thus it can be elucidated from aforesaid that the existence of any one of the conditions specified under Section 34 of the Act 1996 is a precondition for interference with the award by the court. In other words the courts are devoid of the power to interfere with the award if conditions stipulated under Section 34 of the Act 1996 are lacking and not present. 19. The Apex Court by and large has approved the interference in the award by the court under Section 34 of the Act 1996 if the award is perverse or so irrational that no reasonable man would have arrived at the same or it is bereft of reasons or against the public policy or in violation of the principles of natural justice or the Arbitrator has not followed the statutory legal provision of law or if there is something so shocking in the award which pricks the conscience of the 20. The term "public policy" contained in Section 34(b)of the Act 1996 has been defined by the Apex Court in paragraph 31 of the judgment in the case of Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd.5 SCC 705 Paragraph 31 of the judgment reads as under: 31. Therefore in our view the phrase "public policy of India" used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However the award which is on the face of it patently in violation of statutory provisions cannot be said to be in public interest. Such award judgment decision is likely to adversely affect the administration of justice. Hence in our view in addition to narrower meaning given to the term "public policy in Renusagar caseit is required to be held that the award could be set aside if it is patently illegal. The result would be award could be set aside if it is contrary to: a) fundamental policy of Indian law or b) the interest of India or c) justice or morality or d) in addition if it is patently illegal. Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void." 21. At this stage it would also be appropriate to refer to the judgment of Dyna Technologies Private Limitedof the Act 1996. Paragraphs 34 & 35 of the judgment are being reproduced 34. The mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and which can in appropriate cases be even implied by the courts from a fair reading of the award and documents referred to thereunder if the need be. The aforesaid provision does not require an elaborate judgment to be passed by the arbitrators having regard to the speedy resolution of dispute. 35. When we consider the requirement of a reasoned order three characteristics of a reasoned order can be fathomed. They are: proper intelligible and adequate. If the reasonings in the order are improper they reveal a flaw in the decision making process. If the challenge to an award is based on impropriety or perversity in the reasoning then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue. Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner. On the other hand ordinarily unintelligible awards are to be set aside subject to party autonomy to do away with the reasoned award. Therefore the courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards." 22. It would also be apposite to reproduce Section 3 Gof the Act 1956 which provides criteria for assessment of compensation of the land acquired. Section 3 G(7) of the Act 1956 is being reproduced hereinbelow: 3 G. Determination of amount payable as compensation. 7). The competent authority or the arbitrator while determining the amount under sub sectionor sub sectionas the case may be shall take into consideration a) the market value of the land on the date of publication of the notification under section 3A b) the damage if any sustained by the person interested at the time of taking possession of the land by reason of the severing of such land from other land c) the damage if any sustained by the person interested at the time of taking possession of the land by reason of the acquisition injuriously affecting his other immovable property in any manner or his earnings d) if in consequences of the acquisition of the land the person interested is compelled to change his residence or place of business the reasonable expenses if any incidental to such change." 23. On the touchstone of the parameters laid down by the Apex Court explicating when the court can interfere with the award under Section 34 of the Act 1996 and the criteria provided in Section 3 G(7) of the Act 1956 which the competent authority or the Arbitrator shall take into consideration in assessing the compensation the legality of the arbitral award passed by the Collector is being tested and whether in the facts of the present case the District Judge was justified in setting aside the award and directing for payment of compensation treating the land to be commercial 24. The fact as emanates from the record suggest that respondent no.1 being dissatisfied with the compensation awarded by the competent authority raised an arbitration dispute under Section 3 G(5) of the Act 1956. The case of respondent no.1 was that the land in question was commercial land and therefore he is entitled to compensation on the basis of rates applicable to commercial land on the date of notification under Section 3 A of the Act 1956. In respect of the said contention respondent no.1 has produced shreds of evidence namely sale deed dated 01.11.1999 in respect of 168 square meter which was the part and parcel of Gata No.193 the evidence showing that M s Manoj Kumar Dixit was running a transport office in the shop constructed over the land in question copy of registration certificate of the commercial establishmentcopy of khasra in which land in question is recorded as Dukan Abadi . The other pieces of evidence adduced by respondent no.1 which establishes that the land was Abadi land was Rashion Card and Voter I.D. Card. Besides above respondent no.1 also adduced evidence to establish that there was a petrol pump Hyundai showroom tractor agency Nainital Dhaba Fauji Dhaba Shahjahanpur Dhaba Urea and Pesticides shop in the surrounding area of the land in question on the date of notification which proves that commercial activity is also being carried on in the vicinity of land in question. 25. The aforesaid pieces of evidence were filed by respondent no.1 before the Arbitrator but the Arbitrator did not consider any of the evidence adduced by respondent no.1 and rejected the claim of respondent no.1 on the ground that respondent no.1 could not produce any evidence that land in question was outside the limits of the U.P. Roadside Land Control Act 1942. The Arbitrator further recorded a finding that respondent no.1 has not adduced any evidence to prove that construction over land was made after taking necessary approval from the authority. 26. The District Judge while considering the application under Section 34 of the Act 1996 of respondent no.1 has noticed that there was ample evidence adduced by respondent no.1 which proves that land in question was commercial land and the Arbitrator did not consider any of the evidence led by the respondent no.1 while rejecting his claim. Accordingly the District Judge concluded that the award is against the public policy and non speaking hence the application under Section 34(2) of the Act 1996 is maintainable. 27. From the facts detailed above it is clear that the arbitral award is perverse for want of consideration of any of the evidence adduced by respondent no.1 proving that land in question was commercial on the date of notification under Section 3A. 28. At this point it is worth pointing that Section 3 G(7) of the Act 1956 cast a duty upon the Arbitrator to follow the criteria provided in the said Section for determining the compensation. Accordingly the Arbitrator shall determine the compensation as per the market value of the land on the date of publication of the notification under Section 3 A of the Act 1956 whereas in the present case the Arbitrator has failed to assess the compensation as per the market value of the land in question on the date of the notification under Section 3 A of the Act 1956. Thus the Arbitrator has failed to follow the criteria provided in Section 3 Gof the Act 1956 for determining the compensation and the arbitral award is in violation of Section 3 Gof the Act 1956. 29. Therefore in the light of the above discussion this Court finds that the District Judge Shahjahapur 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. 30. Now coming to the next submission of learned counsel for the appellant that since the land in question is recorded as agricultural land in the revenue record therefore merely because the land in question is in use for commercial purpose it would not become commercial land and the compensation awarded the competent authority treating the land to be agriculture land is just and proper and does not warrant interference by the Court. 31. It is worth pointing out that it is evident from the record that overwhelming evidence as detailed above was adduced by respondent no.1 to demonstrate that the land in question was commercial land on the date of notification under Section 3A of the Act 1956. Those pieces of evidence were not rebutted by the appellant. Section 3 G(7)(a provides that compensation shall be determined on the basis of the market value of the land on the date of notification under Section 3 A of the Act 1956. So the criteria for determination of compensation in respect of land acquired is the market value of the land which it could fetch on the date of notification under Section 3 A of the Act 1956. 32. At this stage it would be worth noticing few judgments of the Apex Court where Apex Court has explained with reference to the Land Acquisition Act 1894 as to what criteria should be adopted by the courts in fixing the market value of land. Paragraphs 16.3 and 16.4 of the judgment of the Apex Court in the case of Digamber and Others Vs State of Maharashtra and Others14 SCC 406 are being reproduced hereinbelow: 16.3 Also paras 16 and 17 from Sabhia Mohammed Yusuf Abdul Hamid Mulla v. Land Acquisition Officer 7 SCC 595 are quoted hereunder: 16. We have considered the respective arguments and carefully perused the record. It is settled law that while fixing the market value of the acquired land the Land Acquisition Collector is required to keep in mind the following factors: Existing geographical situation of the land. ii) Existing use of the land. iii) Already available advantages like proximity to National or State Highway or road and or developed area. iv) Market value of other land situated in the same locality village area or adjacent or very near the acquired land. 17. In Viluben Jhalejar Contractor v. State of Gujarat4 SCC 789 this Court laid down the following principles for the determination of market value of the acquired land:17. Section 23 of the Act specifies the matters required to be considered in determining the compensation the principal among which is the determination of the market value of the land on the date of the publication of the notification under sub sectionof Section 4. 18. One of the principles for determination of the amount of compensation for acquisition of land would be the willingness of an informed buyer to offer the price therefor. It is beyond any cavil that the price of the land which a willing and informed buyer would offer would be different in the cases where the owner is in possession and enjoyment of the property and in the cases where he is not. 19. Market value is ordinarily the price the property may fetch in the open market if sold by a willing seller unaffected by the special needs of a particular purchase. Where definite material is not forthcoming either in the shape of sales of similar lands in the neighbourhood at or about the date of notification under Section 4(1) or otherwise other sale instances as well as other evidences have to be considered. 16.4. Further it would be worthwhile to refer to the portion which is extracted from Atma Singh Vs. State of Haryana 2008) 2 SCC 568 which paragraph is referred to at para 18 in Sabhia Mohammed Yusuf Abdul Hamid Mulla v. Land Acquisition Officer 7 SCC 595 which reads thus: 5. For ascertaining the market value of the land the potentiality of the acquired land should also be taken into consideration. Potentiality means capacity or possibility for changing or developing into state of actuality. It is well settled that market value of a property has to be determined having due regard to its existing condition with all its existing advantages and its potential possibility when led out in its most advantageous manner. The question whether a land has potential value or not is primarily one of fact depending upon its condition situation uses to which it is put or is reasonably capable of being put and proximity to residential commercial or industrial areas or institutions. The existing amenities like water electricity possibility of their further extension whether nearabout town is developing or has prospect of development have to be taken into consideration." 33. In the case of Attar Singh and Another Vs. Union of India and Another9 SCC 289 the Apex Court explained in paragraphs 7 to 9 of the judgment the norms to be applied for the determination of the market value of the land. Paragraphs 7 to 9 of the said judgment are being reproduced hereinbelow: 7. It is now a well settled principle of law that determination of the market value of the land acquired indisputably would depend upon a large number of factors including the nature and quality thereof. The norms which are required to be applied for determination of the market value of the agricultural land and homestead land are different. In given cases location of land and in particular closeness thereof from any road or highway would play an important role for determination of the market value wherefor belting system may in appropriate cases may be resorted to. The position of the land particularly in rainy season existence of any building etc. also plays an important role. A host of other factors including development in and around the acquired land and or the potentiality of development will also have a bearing on determination of the fair market value of the land. 8. Determination of the market value of the land may also depend upon the facts and circumstances of each case amongst them would be the amount of consideration mentioned in a deed of sale executed in respect of similarly situated land nearabout the date of issuance of notification in terms of Section 4(1) of the Act in the absence of any such exemplars the market value can be determined on yield basis or in case of an orchard on the basis of number of fruit bearing trees. 9. It is also well settled that for the purpose of determination of price of acquired land the courts would be well advised to consider the positive and negative factors as has been laid down by this Court in Viluben Jhalejar Contractor v State of Gujarat 2005SCC 789: Positive factors Negative factors i) smallness of size largeness of area ii) proximity to a road situation in the interior at a distance from the road iii) frontage on a road narrow strip of land with very small frontage compared to iv) nearness to developed area lower level requiring the depressed portion to be filled up v) regular shape remoteness from developed vi) level vis a vis land under some special disadvantageous acquisition factors which would deter a purchaser vii) special value for an owner of an adjoining property to whom it may have some very special advantage." 34. 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 owner of the land. In the absence of any direct evidence the other method as elucidated by the Apex Court in the judgements referred above may be taken recourse 35. The District Judge in concluding that the land in question was commercial land has considered unrebutted pieces of evidence adduced by respondent no.1 which established that the land in question is commercial. It further held that simply because the land is recorded as agricultural land in the revenue record that does not mean that the claimant would be entitled to compensation on the rates applicable to agricultural land. Applying the principle laid down by the Apex Court that the best method to determine the market value of the land is the amount which a willing purchaser would pay to the owner of the land this court finds that the view taken by the District Judge that the respondent no. 1 is entitled to compensation as per commercial rate of the land is 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 is commercial land therefore it is obvious that the willing purchaser would offer the price of commercial land to purchase the land in question which means that the market value of the land in question is the price of commercial land in the area where land is situated. 36. Thus it can be concluded that the competent authority or the arbitrator in determining the compensation is only to consider the market value of the land on the date of notification under Section 3A of Act 1956 and the nature of land recorded in the revenue record is not relevant for determining the compensation. Therefore the court finds that the District Judge has rightly issued direction to pay compensation of the land treating it be commercial land Consequently 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 is devoid of substance and rejected. 37. Now another question that arises for consideration is whether the District Judge was justified in directing payment of compensation treating the land to be commercial land instead of remanding the matter back to the Arbitrator or leave it open to the parties to approach the Arbitrator again. 38. In this respect it is useful to notice that Section 3 A to 3 F of the Act 1956 provides a mechanism for acquisition of land where the Central Government is satisfied that for public purposes any land is required for building maintenance management or operation of a national highway or part thereof it can acquire the land by following the procedure provided under Section 3 A to 3 F of the Act 1956 and take possession of the land. Section 3 Gof the Act 1956 provides for a mechanism for the determination of compensation. Section 3 Gof the Act 1956 provides that if the party is dissatisfied with the amount of compensation it can approach the Arbitrator. Thus under the scheme of the Act 1956 land is acquired compulsorily if the conditions envisaged in Section 3(A) of the Act 1956 exists. After the acquisition of the land competent authority shall determine the compensation and pass an award. If the landowner is not satisfied with the award the only remedy available to the landowner is to seek arbitration under Section 3 Gof the Act 1956 before an Arbitrator appointed by the Central Government. 39. The legislature has provided criteria under Section 3 Gof the Act 1956 for determining the compensation with an object that the landowner shall be compensated adequately for the loss suffered by him on account of compulsory acquisition of his land. Section 3 Gof the Act 1956 is a benevolent provision for the benefit of the landowner and if the claimant is not satisfied with the compensation the remedy to raise arbitration dispute by the landowner is contemplated under the Act with a purpose to grant quick relief to the landowner to save the landowner from being dragged into long drawn routine litigation. It is also to bear in mind that the Arbitration Proceedings under the Act 1956 does not arise of commercial contract where the parties have agreed to go in arbitration in case of any dispute arising out of the contract rather a mechanism of Arbitration conceived under the Act 1956 is to provide speedy remedy to landowners. Thus it is obvious that the legislature while inducting the provision of arbitration under Section 3 G(5) of the Act 1956 must have been conscious of the fact that the Arbitrator appointed by the Central Government would act fairly and independently and follow the criteria given in Section 3 Gof the Act 1956 in determining the 40. Thus it is manifest that the provision of arbitration in the Act 1956 has been inserted with a purpose to provide a quick remedy to landowners therefore in such circumstances it cannot be said that the court is denuded of the power to modify the award for the ends of justice to provide relief to the landowner so that he may not suffer indefinitely to get just compensation as per law else any other conclusion would thwart the object of providing the remedy of Arbitration in the Act 1956. At this point it would again be useful to refer to paragraph 37 of the judgment of Apex Court in the case of Dyna Technologies Private Limitedwherein the Apex Court did not find it proper in the interest of justice to remand the matter to the Tribunal as the case has taken 25 years for its adjudication. Paragraph 37 of the said judgment is being reproduced hereinbelow: 37. In case of absence of reasoning the utility has been provided under of Section 34(4) of the Arbitration Act to cure such defects. When there is complete perversity in the reasoning then only it can be challenged under the provisions of Section 34 of the Arbitration Act. The power vested under Section 34of the Arbitration Act to cure defects can be utilised in cases where the arbitral award does not provide any reasoning or if the award has some gap in the reasoning or otherwise and that can be cured so as to avoid a challenge based on the aforesaid curable defects under Section 34 of the Arbitration Act. However in this case such remand to the Tribunal would not be beneficial as this case has taken more than 25 years for its adjudication. It is in this state of affairs that we lament that the purpose of arbitration as an effective and expeditious forum itself stands effaced." 41. On perusal of judgments in respect of quantum of compensation mentioned in the memo of appeal on which reliance has been placed by the appellant I find that none of them is applicable in the facts of the present case since those judgments have been referred under the Indian Stamp Act whereas the present case is under the Act 1996 wherein Section 3 Gstipulates the criteria which the Arbitrator shall consider in determining the compensation. 42. Accordingly this Court for the reasons given above finds that the District Judge has rightly modified the award and directed for payment of compensation treating the land to be commercial land. 43. Thus for the reasons given above the appeal lacks merit and is accordingly dismissed. There shall be no order as to costs. Order Date : 19.4.2021 Visit legalix StartWebSearch.do for more Judgments Orders delivered at Allahabad High Court and Its Bench at Lucknow. Disclaimer

Summary: It has been rightly modified that the award and directed for payment of compensation treating the land to be commercial land so the compensation is also entitled at the rate of commercial land, said: “Justice Saral Srivastava” of the Allahabad High Court in the matter of Bhartiya Rashtriya Rajmarg v. Smt. Manju Dixit and others [APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. – 8 of 2021] The order was issued over the facts that on circle rates applicable to agriculture land and declared the award under Section 3-G of the Act, 1956. The brief facts of the case are that the appellant issued notification dated 16.11.2009 in the exercise of power under Section 3-A (1) of the National Highway Act, 1956 (hereinafter referred to as) with respect to the lands located in a number of villages for the widening of NH-24 to four lanes. Respondent no.1’s Gata No.193 area 0.1260 hectare (hereinafter referred to as the ‘land in question’) in village Maujampur, Tehsil Sadar, district Shahjahanpur was also acquired by the said notification. The learned counsel further said “He further submits that it is established from the evidence on record that land in question is recorded as agriculture 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. Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence” According to the evidence, respondent no.1 filed an arbitration dispute under Section 3-G(5) of the Act of 1956 because he was dissatisfied with the compensation awarded by the competent authority. Respondent no.1 filed the aforementioned pieces of evidence before the Arbitrator, but the Arbitrator did not consider any of the evidence adduced by respondent no.1 and rejected respondent no.1’s claim on the grounds that respondent no.1 could not produce any evidence that the land in question was outside the limits of the U.P. Roadside Land Control Act, 1942.