FINDINGS OF COURT:

(Passed by The Court Of Principal District Judge, Nagpur on 29.08.2015)

 As regards to the admitted facts, there was a proposal for acquisition of the suit
land for the National Highway purpose (No.7), under the NH Act, 1956. The Spl.
Land Acquisition Officer (Competent Authority) was appointed by the Central
Government (Notification dated 5/10/2005 & 26/4/2011). Notification u/s 3-A
was published on 21/06/2010. After declaration u/s 3-D the competent authority
had determined the market value which accrues to Rs. 1 Cr. / Hector.

 Upon being aggrieved by the amount, the claimant referred the dispute for
Arbitration u/s 3-G(5). The Arbitrator awarded to claimant @Rs. 13,30,56,000/-
for the acquired land (1 H .28 R.) (In addition to this, the additional
compensation amount for the loss of easement right + @ 9% PA on the enhanced
compensation amount). Being aggrieved by the findings of the Ld. arbitrator, the
acquiring body, NHAI, by invoking remedy u/s. 34 preferred the present
application.

On Point No. 1:

 The Non-Applicant has raised the objection on the maintainability of

Application filed u/s 34 of the ACA, 1996. Under NH Act the only thing that is
given regarding the Arbitration is the reference u/s 3-G (5) and no recourse
under s.34 can be sought in the present case. Only for the procedural aspect,
the provisions are applicable and not to agitate the validity of the award.

 The Petitioners had contended that under the ambit of section 3-G(6), the
provisions of the ACA, 1996 are applicable to the referred disputes. Therefore,
the court has jurisdiction to entertain the petition u/s 34. Petitioners have
relied on Hon'ble Karnataka High Court in Writ Petition No. 11214/2012 and
21999/2012, that “the Civil Court has jurisdiction to proceed with the matter
u/s. 34(2) of the Arbitration Act, 1996 to find out the legality of the award
made by the arbitrator under the National Highways Act”

 The court upon the reading of sections 3-G(5) and 3-G(6) has observed that it is
imperative for Ld. arbitrator to conduct the proceeding by adopting the procedure
prescribed under the Arbitration Act., and it will apply to every arbitration under
the NH Act, 1956. It means that the provision of sub sec. 6 of sec. 3-G does not
restrict the application of Arbitration Act, 1996 only to the extent of proceeding
filed under sub section 5 of sec. 3-G of the Act, 1956 before the Ld. Arbitrator.
But, it would also apply to the further arbitration proceeding continued by filing
petition u/s. 34(2) of the Arbitration Act, 1996. (Para 7)

 Section 2(4) of the ACA, 1996 is applicable to Part I and Sec. 34 too fall under
Part I, therefore, Sec. 34 shall apply to every arbitration as if the Arbitration were
pursuant to an agreement. Section 34(2) will apply to every arbitration arising
under the provisions of N.H. Act, as if, there is arbitration agreement between the
parties, particularly when there is no inconsistency between the provisions of
Arbitration Act and the provisions of N.H. Act in that aspect of the matter. (Para
7)
 Thus, is it amply clear that the Civil Court has got jurisdiction to proceed with the
matter under Section 34(2) of Arbitration Act, to find out the legality of the award
made by the Arbitrator under the provisions of N.H.Act." The Court considered
the guidleines by Hon’ble Karnataka High Court and found that the present
petition u/s 34 is maintainable to determine the validity of the award. Point 1-
Affirmative. (Para 7)

On Point no. 2:

 On the determination of the market value, it is the contention of the

Petitioners that the impugned award passed is totally arbitrary, bias and
without application of mind. Arbitrator has erroneously appreciated the
valuation report of the gov. approved valuer without any base and determined
the exorbitant market value of the land under acquisition. Arbitrator has
failed to apply his judicious mind and have arbitrarily taken sales instances
into consideration. f residential locality of Sahara- prime City etc. as well as
another village Jamtha to ascertain the market value of the land. any evidence
about the bona- fide nature of the sale transaction, location of the land, its
advantages, potential value etc. to show its resemblance with the acquired
land. There are errors apparent on the face of award.

 The Non-applicant contends that, the jurisdiction of this Court u/s. 34 of the
Act 1996 is limited and the award could be set aside only on the ground that
the same is in conflict with the public policy of India. In the instant case, there
were no violation of provisions of the law. But, the Ld. arbitrator after
appreciating the sale instances of the land situated nearby the acquired land,
as well as valuation reports of expert determined the market value of the
acquired land. Therefore, there is no illegality committed on the part of Ld.
arbitrator. Hence, the award cannot be set aside.

 The court has placed reliance on the guidelines laid down by the Apex Court in
Sudarsan Trading Co. - Vs – Government of Kerala, reported in
1989(2) SCC 38, he arbitrator is the sole judge of the quality as well as the
quantity of the evidence and the court has no permission to take upon itself the
task of being a judge on the evidence of the arbitrator, However, if the award is
excess of jurisdiction the award is liable to be set aside. (Para 10)

 The matter in controversy in this case is in regard to allegations that the Ld.
arbitrator exceeded his jurisdiction and awarded the exorbitant compensation by
violating the rules prescribed for the same. The Ld. arbitrator also ignored the
principles of natural justice and committed legal misconduct by wrong and
incorrect conclusion without appreciating the attending circumstances in its
proper perspective. (Para 11)

 As per the mandate of sub-Sec. 7(a) of 3G of the NH Act, the Arbitrator shall take
into consideration the market value of the land on the date of Notification u/s 3-
A. The notification in the present case was passed on 21/06/2010, therefore,
market value of June 2010 was to be appreciated. (Para 12)
 As per Sec. 3J, Land Acquisition act 1894 is not applicable to the NH Act. Also,
regarding the binding procedure under CPC, it is up to the parties to agree on the
procedure. In absence of any procedural aspect in the NH Act, as to the mode an
manner to determine just and fair market value, it would be desirable to take
recourse under the Land Acquisition Act while determining Market Value under
NH Act. The court must apply these statuary guidelines. (Para 14)

 The claimant did not whisper about all the aforesaid circumstances in his claim
petition filed u/s. 3-G(5) of the Act before the Ld. Arbitrator. There was no
reference about the location of the contentious suit land as described by the Ld.
arbitrator. These circumstances adumbrate that the Ld. arbitrator incorporated
all these facts in the award after deriving the same from his personal knowledge.
(Para 18)

 The impugned award is a speaking award and therefore this court has a power to
evaluate that the decision of the Ld. arbitrator for market value of the suit lands
was just and proper or whether there are errors on the face of award when the
reasons for the decision in the award are based upon legal preposition which is
erroneous one. (Para 19)

 The conclusion of the Ld. arbitrator appears rest on his personal knowledge
simpliciter and therefore, the possibility of erroneous decision in regard to
market value of the suit land could not be ruled out. In addition, the
circumstances indicate utter failure of Ld. arbitrator to deal with the matter
within the legal parlance. (Para 19)

 The Ld. arbitrator did not summon the Government approved valuer as a witness
to bring on record the characteristic of the land under valuation for verification to
test its applicability for basis to ascertain market value of contentious suit land.
To my mind, the oral evidence of the valuer was vital and significant one. (Para
19)

 There are errors on the face of award. The conclusion drawn by the Ld. arbitrator
appears erroneous and suffers from infirmities. It cannot be accepted being just
and fair market value of suit land. In contrast, it seems that the Ld. arbitrator
dealt with the proceeding in casual and slipshod manner. He ventured to travel
beyond jurisdiction and failed to comply the provision of S.3(G)(7)(a) of the Act,
1956 in its true spirit. Arbitrator misconducted himself in the proceeding. (Para
20)

 The Photo-stat copies of all these relevant documents are placed on record. It
would hazardous to keep implicit reliance on the photo-stat copy of the vital
document to determine the market value of the suit land. The Ld. arbitrator much
more gave emphasis on the valuation report drafted and prepared by the
government approved valuer But, in absence of its authentic document on record,
it is unsafe to keep implicit reliance on it. (Para 20)

 The Ld. arbitrator simultaneously ignored the objections raised on behalf of

acquiring body i.e. National Highways Authority of India in this case. It reveals
that the Ld. arbitrator has taken a perfunctory and superficial view without any
legal basis. He failed to apply his judicious mind to the circumstances in its
proper perspective. Therefore, the quantum of market value determined by the
Ld. arbitrator is erroneous, not sustainable at all, on the face of record. (Para
20) Point No. 2- Answered Accordingly

On Point No. 3

 There is no provision in the Highways Act, 1956 which lays down the
procedure to be followed by the arbitrator. The procedure must therefore be
governed by the natural justice and one of this that no matter should be
decided without any inquiry. (Para 21)

 The Ld. arbitrator dealt with the proceeding with a very casual and superficial
manner. The roznama of the proceeding adumbrates that there was no
hearing as such conducted in the proceeding on behalf of both sides. It is
preposterous to appreciate that the Ld. arbitrator has no acquaintance with
the procedural law. (Para 22)

 The Ld. arbitrator passed the impugned award bare on the basis of Photostat
copies of the documents already placed on record. These circumstances reflect
the superficial and causal approach to deal with the matter on the part of Ld.
arbitrator. (Para 23)

 The Ld. arbitrator ventured to utilize his own personal knowledge and
expressed the findings of location and situation as well as NA potentiality of
the contentious suit land, in absence of any pleadings to that effect on behalf
of claimant in this case. The Ld. arbitrator appears committed error by
appreciating the circumstances in this case unilaterally on the basis of his
personal knowledge. (Para 24)

 In view of aforesaid legal proposition, the lower court held that in the interest
of natural justice the same analogy is required to be applied in this
proceedings for determination of compensation amount, under sub sec.5 of
sec. 3-G of the Act, 1956. (Para 25)

 Under 3G (5), it is not an appeal. The order of the competent authority cannot
be treated as a judgment of the trial Court to approve or disapprove its
reasoning or to correct its error etc. The Arbitrator has to treat the matter as
an original proceeding to determine the market value afresh on the documents
before him. The Arbitrator has dealt with the matter as an appeal. He has not
followed the mandatory procedure prescribed under the Arbitration Act for
resolution of dispute on merit. There are errors on the face of it. The conduct
on the part of Ld. arbitrator tantamount to misconduct within the purview of
sec. 34 of the Arbitration Act, 1996. (Para 26)

 Therefore, (i) the impugned award passed by the Ld. arbitrator is contrary to
the substantive provisions of law, resulting into miscarriage of justice. The
award being patently illegal one deserves to be interfered by exercising the
 powers u/s. 34 of the Act. There are errors apparent on the face of record.
(Para 27)

 (ii) The impugned award is an speaking award and the conclusion drawn by
the Ld. arbitrator for calculation of market value of the suit land appears
based on surmises and conjectures. The Ld. arbitrator utilized his personal
knowledge in absence of any oral or documentary proof in this case. The
conclusion of the Ld. arbitrator appears purely rests on figment of
imagination. The Ld. arbitrator failed to appreciate the material factors in its
proper perspective and did not apply his judicious mind to the legal aspect of
the dispute for its adjudication on merit. Therefore, the impugned award
cannot be sustained as it suffers from error apparent on the face of record.
(Para 27)

 (iii)The Ld. arbitrator also ventured to travel beyond jurisdiction and

committed misconduct resulting into erroneous findings which are discernible
from the award itself. Therefore, the misconduct on the part of Ld. arbitrator
resulted into injustice and improper determination of market value of the suit
land, tend to show non-application of mind to the material facts, in the
proceeding. (Para 27)

 Hence, the impugned award passed by the Ld. Arbitrator is set aside and
quashed. Point No. 3 Affirmative (Para 27)