In a significant ruling, the Allahabad High Court has directed the re-calculation of compensation for land acquired under the National Highways Act, 1956. The judgment was delivered by Justice Shekhar B. Saraf in Appeal Under Section 37 of Arbitration and Conciliation Act 1996 No. – 210 of 2023.
Case Background:
The appellant, Smt. Savitri Devi, owned a plot of land (No. 294, later re-numbered as 323) measuring 0.038 hectares in Mauja Madwanagar, District Basti. This land, along with two residential buildings, was acquired for the construction of National Highway No. 28. The total compensation initially determined was Rs. 14,87,493.70, which was paid to the appellant on December 2, 2008.
Aggrieved by the valuation, Smt. Savitri Devi sought arbitration. The arbitrator, in an award dated December 11, 2008, re-determined the valuation of the building only, awarding Rs. 18,67,881 to the appellant. Both parties challenged this award under Section 34 of the Arbitration Act before the Additional District Judge, Basti, who dismissed their applications on October 21, 2022.
Legal Issues and Court’s Decision:
1. Patent Illegality in Arbitral Award:
The court found that the arbitrator had failed to consider the appellant’s arguments regarding land valuation, focusing solely on the building’s value. Justice Saraf ruled that this omission constituted a patent illegality, warranting interference under Section 37 of the Arbitration Act.
2. Applicability of Supreme Court Judgment:
The court addressed whether the appellant could claim benefits as per the Supreme Court’s judgment in Tarsem Singh vs. Union of India (2019). Justice Saraf held that since the arbitration concluded in 2008, prior to the Tarsem Singh judgment, the appellant could not claim additional solatium or interest based on that ruling.
3. Retrospective Application of Judgments:
The court discussed the principle of retrospective application of Supreme Court judgments, citing cases like P.V. George vs. State of Kerala (2007) and Manoj Parihar vs. State of J&K (2022). However, it concluded that reopening concluded arbitrations based on subsequent judicial decisions would lead to legal chaos.
Final Verdict:
Justice Saraf set aside the arbitral award of December 11, 2008, to the limited extent of non-consideration of compensation for land. The matter has been remitted back to the arbitrator with directions to recalculate the compensation for the appellant’s land in accordance with the law.
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Lawyers Involved:
– For the Appellant: Mr. Rahul Agarwal and Ms. Akashi Agarwal
– For the Respondents: Mr. Vaibhav Tripathi
