TaxTMI 
TaxTMI 
2023 (4) TMI 1396
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....583-2022, FAO-2067-2022, FAO-578-2022, FAO-2068-2022, FAO-766-2022, FAO-2077-2022, FAO-765-2022, FAO-3090-2022, FAO-761-2022, FAO-3084-2022, FAO-779-2022, FAO-2388-2022, FAO-774-2022, FAO-2062-2022, FAO-771-2022, FAO-3088-2022, FAO-773-2022, FAO-2073-2022, FAO-772-2022, FAO-2059-2022, FAO-584-2022, FAO-2058-2022, FAO-579-2022, FAO-780-2022, FAO-653-2022, FAO-615-2022, FAO-572-2022 and FAO-2060-2022 HON'BLE MR. JUSTICE AVNEESH JHINGAN For the Appellant : K.S. Kang, D.K. Singal, Sumit Gupta, B.S. Toor, Rahul Garg and Vishavdeep Gupta, Advocates For the Respondent : Puneet Bali, Senior Advocate, Vishal Aggarwal, Karan Nehra and Nitin Mehta, Advocates JUDGMENT AVNEESH JHINGAN, J. 1. The Union of India/National Highways Authority of India(NHAI) and the land owners are before this Court in appeals under Section 37 of Arbitration and Conciliation Act, 1996 (for short 'the 1996 Act'). 2. The aforementioned appeals are being disposed of by a common order as these arise from one acquisition, involving similar facts and issues. 3. For convenience the facts are being considered from FAO-756-2022 and cross appeal FAO-2065-2022. 4. The facts shorn off unnec....
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....ue record. So, each co sharer will not be separately entitled for the compensation on account of severance unless a partition is reflected in record." 6. Learned counsel for NHAI submitted that the provisions of The Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 (for short, 'the 2013 Act') would not apply to the acquisition in question. The submission is fortified by arguing that the conditions in clause 4.6 (iii)(a) and (b) of the guidelines dated 28.12.2017 issued by the Ministry of Road Transport and Highways (hereinafter referred to as 'MORTH') (hereinafter referred to as 'guidelines') were complied with by NHAI. It is argued that the prior to 31.12.2014 full amount of the award was deposited. Decision of Rajasthan High Court in Gopa Ram v. Union of India, Civil Writ Petition No. 12746 of 2017, decided on 22.1.2018 was relied upon to argue that the terms 'deposit' and 'paid' used in guidelines have same meaning. It is contended that market value was to be determined as per the provisions of 3G(7) of the 1956 Act and other provisions of the 2013 Act cannot be made applicable. Th....
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....te partnership projects, whichever is higher: Provided that the date for determination of market value shall be the date on which the notification has been issued under section 11. Explanation 1.-The average sale price referred to in clause (b) shall be determined taking into account the sale deeds or the agreements to sell registered for similar type of area in the near village or near vicinity area during immediately preceding three years of the year in which such acquisition of land is proposed to be made. Explanation 2.-For determining the average sale price referred to in Explanation 1, one-half of the total number of sale deeds or the agreements to sell in which the highest sale price has been mentioned shall be taken into account. Explanation 3.-While determining the market value under this section and the average sale price referred to in Explanation 1 or Explanation 2, any price paid as compensation for land acquired under the provisions of this Act on an earlier occasion in the district shall not be taken into consideration. Explanation 4.-While determining the market value under this section and the average sale price referred....
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.... xx xx xx 28. Parameters to be considered by Collector in determination of award.-In determining the amount of compensation to be awarded for land acquired under this Act, the Collector shall take into consideration- firstly, the market value as determined under section 26 and the award amount in accordance with the First and Second Schedules; secondly, the damage sustained by the person interested, by reason of the taking of any standing crops and trees which may be on the land at the time of the Collector's taking possession thereof; thirdly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of severing such land from his other land; fourthly, the damage (if any) sustained by the person interested, at the time of the Collector's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings; fifthly, in consequence of the acquisition of the land by the Collector, the person interested is compelled to change his residence or place of bus....
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....ation of amount payable as compensation- xx xx xx (7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub-section (5), as 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. First Schedule of the 2013 Act THE FIRST SCHEDULE [See section 30(2)] COMPENSATION FOR LAND OWNERS The following components shall constitute the minimum compensation package to be given to those whose land is acquired and to ten....
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....FCTLARR Act provided for issuing of notification to make the provisions of the Act relating to the determination of the compensation, rehabilitation and resettlement applicable to cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act; And whereas, the notification envisaged under sub-section (3) of Section 105 of the RECTLARR Act was not issued, and the RFCTLARR (Amendment) Ordinance, 2014 (9 of 2014) was promulgated on 31st December, 2014, thereby, inter-alia, amending Section 105 of the RFCTLARR Act to extend the provisions of the Act relating to the determination of the compensation and rehabilitation and resettlement to cases of land acquisition under the enactments specified in Fourth Schedule to the RFCTLARR Act; And whereas, the RFCTLARR (Amendment) Ordinance, 2015 (4 of 2015) was promulgated on 3rd April, 2015 to give continuity to the provisions of the RFCTLARR (Amendment) Ordinance, 2014; And whereas, the RFCTLARR (Amendment) Second Ordinance, 2015 (5 of 2015) was promulgated on 30th May, 2015 to give continuity to the provisions of the RFCTLARR (Amendments) Ordinance, 2015 (4 of 2015); And ....
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....on under the enactments specified in the Fourth Schedule to the said Act." Guidelines issued by MORTH: xx xx xx "4.6 Date of determination of market value of land (i) Another related but important question is regarding the date on which the market value of land is to be determined in cases where land acquisition proceedings had been initiated under the NH Act, 1956 and were at different stages as on 31.12.2014. While there is no ambiguity regarding land acquisition proceedings initiated on or after 01.01.2015, this question assumes significance in view of the financial implications in respect of cases where the process of acquisition was a different stages as on 01.01.2015. (ii) Section 26 of the RFCTLARR Act stipulates that "the date for determination of market value shall be the date on which the notification has been issued under Section 11 (corresponding to Section 3A of the NH Act)". Same was the position under the 1894 Act. This is further fortified from the provisions contained in Section 69(2) of the RFCTLARR Act. As such, it is clarified that the relevant date of determination of market value of land is the date on which notific....
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....ment's intervention in acquisition of land was limited to defence and certain development projects. Consent of 80% of the families affected by project was to be obtained through a prior informed process. Scientific method for calculation of market value was proposed for ensuring comprehensive package. The benefit of the new law was extended to all cases under the 1894 Act where the award was not passed or possession of land not taken. 12. Section 26 of the 2013 Act gives the criteria to be adopted for assessing the market value of the land. The proviso to sub-section (1) provides that the market value shall be determined as on the date of notification under Section 11 of this Act. As per sub-section (2), the market value to be calculated under sub-section (1) shall be multiplied by the factors specified in First Schedule to the Act. Sub-section (3) deals with the cases where the market value cannot be determined as per sub-sections (1) and (2). In such circumstances, the State Government shall specify the floor price and minimum price per unit of the land acquired based upon the calculation as per sub-section (1) considering similar types of land situated in the immediate ad....
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....of clause 4.6 deals with applicability of First, Second and Third Schedule appended to the 2013 Act. Sub-clause 4.6(iii) has three clauses. Clause (a) provides two instances in which compensation is to be paid in accordance with First Schedule to the 2013 Act. In all cases where award was not announced under Section 3-G of the 1956 Act till 31.12.2014 or where the award is announced but compensation not paid as on 31.12.2014 in respect of majority of land holding under acquisition. Sub-clause (b) deals with cases where the award under Section 3-G of the 1956 Act was announced before 1.1.2015 but the full amount of award was not deposited by the acquiring agency with CALA. In such cases also, the compensation is to be determined in accordance with First Schedule w.e.f 1.1.2015. As per sub-clause (c) where the process of land acquisition is deemed to be complete and settled, such cases are not to be re-opened. The pre-requisites under sub clause (c) are that on or before 31.12.2014, the award under Section 3-G of the 1956 Act was announced by CALA, the amount deposited by the acquiring agency with CALA and compensation paid to the land owners in respect of majority of land holdings u....
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....lear that the Government has itself accepted that the principle of Nagpur Improvement Trust (supra) would apply to acquisitions which take place under the National Highways Act, and that solatium and interest would be payable under the 2013 Act to persons whose lands are acquired for the purpose of National Highways as they are similarly placed to those landowners whose lands have been acquired for other public purposes under the 2013 Act. This being the case, it is clear that even the Government is of the view that it is not possible to discriminate between landowners covered by the 2013 Act and landowners covered by the National Highways Act, when it comes to compensation to be paid for lands acquired under either of the enactments. The judgments delivered under the 1952 Act as well as the Defence of India Act, 1971, may, therefore, require a re-look in the light of this development. In any case, as has been pointed out hereinabove, the case of Chajju Ram (supra), has been referred to a larger Bench. In this view of the matter, we are of the view that the view of the Punjab and Haryana High Court is correct, whereas the view of the Rajasthan High Court is not correct." 22. The....
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....ne before 31.12.2014 i.e. the award to be announced by CALA under Section 3-G of the 1956 Act; amount to be deposited by the acquiring agency with CALA and lastly compensation to be paid to the majority of land holdings under acquisition. Sub-clause (b) makes First Schedule of the 2013 Act applicable to the cases where the award was announced before 1.1.2015 but full payment of the amount awarded was not deposited with CALA. All the cases where the award was not announced on 31.12.2014 or the compensation to the majority of the land holdings under acquisition was not paid as on 31.12.2014 the benefit of First Schedule of 2013 Act was made applicable by sub-clause (a). 27. It would be apt to note that in clause (a), the expression 'paid' is used whereas in clause (b), it is 'deposited'. The argument raised by learned counsel for NHAI is based upon the reading of the word 'deposited' in clause (a) instead of 'paid'. The contention is against the rules of interpretation and would result in doing violence to the plain language of the guidelines and to the intent for issuing the guidelines. 28. It is admitted case that payment to majority of land ho....
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.... "In that view of the matter, though Section 3G(7)(a) of the NH Act provides the parameters to be taken into consideration, it only provides the basic parameters to be taken note of, for determining the amount payable as compensation. While applying the said parameters for determination of compensation, since RFCTLARR Act, 2013 is also applicable as NH Act is contained in Fourth Schedule, the factors as provided under Section 26 and 28 RFCTLARR Act, 2013 including the seventh factor will also be applicable in appropriate cases for the determination of the market value as fair compensation for the acquired land. When land is acquired from a citizen, Articles 300A and 31A of the Constitution will have to be borne in mind since the deprivation of property should be with authority of law, after being duly compensated. Such law should provide for adequately compensating the land loser keeping in view the market value. Though each enactment may have a different procedure prescribed for the process of acquisition depending on the urgency, the method of determining the compensation cannot be different as the market value of the land and the hardship faced due to deprivation of the ....
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....te law field, need not be a speaking award even where the award relates to the contact of private parties or between person and the Government or public sector undertakings. The principle is the same, namely the award is governed by Section 31(3)." 36. The Supreme Court in Oil & Natural Gas Corporation Ltd. v. SAW Pipes Ltd., 2003(5) SCC 705 held: "Similarly, if the award is non-speaking one and is in violation of Section 31(3), can such award be set aside? In our view, reading Section 34 conjointly with other provisions of the Act, it appears that the legislative intent could not be that if the award is in contravention of the provisions of the Act, still however, it could not be set aside by the court. If it is held that such award could not be interfered, it would be contrary to basic concept of justice. If the arbitral tribunal has not followed the mandatory procedure prescribed under the Act, it would mean that it has acted beyond its jurisdiction and thereby the award would be patently illegal which could be set aside under Section 34." 37. In M/s. Som Datt Builders Ltd. v. State of Kerala, 2009(10) SCC 259, the Supreme Court held: "The requirement of ....
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....tuated in India- (a) In an arbitration other than an international commercial arbitration, the Arbitral Tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India;" 42.2. (b) A contravention of the Arbitration Act itself would be regarded as a patent illegality - for example if an arbitrator gives no reasons for an award in contravention of Section 31(3) of the Act, such award will be liable to be set aside. 42.3. (c) Equally, the third subhead of patent illegality is really a contravention of Section 28(3) of the Arbitration Act, which reads as under: "28. Rules applicable to substance of dispute. - (1) - (2) *** (3) In all cases, the Arbitral Tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction." [2015] 3 SCC 49 This last contravention must be understood with a caveat. An Arbitral Tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the ....
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....exercise can be undertaken to the limited extent without entering into merits where it is seen that the Arbitrator has on the face of the award not appropriately considered the material on record or has not recorded reasons for placing reliance on materials available on record in the background of requirement under RFCTLARR Act, 2013. [Emphasis supplied] 40. The Supreme Court in Dr. A. Parthasarathy vs E. Springs Avenues Pvt. Ltd., 2022(1) Apex Court Judgments (SC) 130 held: "3. By the impugned judgment and order passed by the High Court in exercise of power under section 37 of the Arbitration and Conciliation Act, 1996, the High Court has set aside the award passed by the learned Arbitrator and has remanded the matter to the Arbitrator for fresh decision. As per the law laid down by this Court in the case of Kinnari Mullick and Anr. v. Ghanshyam Das Damani (2018) 11 SCC 328 and I-Pay Clearing Services Pvt. Ltd. v. ICICI Bank Ltd. (2022) SCC OnLine SC 4, the same is wholly impermissible. Only two options are available to the Court considering the appeal under section 37 of the Arbitration Act. The High Court either may relegate the parties for fresh arbitration or to....
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....o comment further on the determination of compensation. Suffice to say, the minimum requirement was that the arbitrator should have dealt with the factors to be considered and given reasons either for applying the said factors or for not adopting them. The non-speaking award is patently illegal being violative of Sections 28(1)(a) and 31(3) of the 1996 Act. 43. In view of above discussion, the issue raised by learned counsel for the land owners for sustaining the award as the modified relief granted under Section 34 of the 1996 Act was not being pressed has been rendered academic and needs no further expounding. 44. Resultantly, the impugned orders and the award are set aside. The parties would be at liberty to avail remedies in accordance with law for initiation of fresh arbitration. 45. The appeals are disposed of accordingly. Pending application(s), if any, are also disposed of. 46. Before parting, it would be relevant to note that under the 1956 Act, the land owners have to part with their land involuntarily. To achieve the object for expeditious acquisition, the mechanism has been provided under the 1956 Act which provides for determination of the compensation by C....