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CDJ 2026 MHC 3419 print Preview print print
Court : High Court of Judicature at Madras
Case No : CMA No. 3077 of 2023 & CMP Nos. 29103 of 2023 & 10450 of 2024
Judges: THE HONOURABLE MR. JUSTICE P. VELMURUGAN & THE HONOURABLE MRS. JUSTICE K. GOVINDARAJAN THILAKAVADI
Parties : The Project Director National Highways Authority of India, Krishnagiri Versus Vaniyambadi Effluent Treatment Company Pvt Ltd. Rep. by its Managing Director N.Srinivasan, Vellore & Others
Appearing Advocates : For the Appellant: Su. Srinivasan, Advocate. For the Respondents: R1, K. Vijayaraghavan for C. Sivanesan, Advocates, R2 & R3, P. Gurunathan, AGP.
Date of Judgment : 29-04-2026
Head Note :-
Arbitration & Conciliation Act, 1996 - Section 37(1) & (2) -
Judgment :-

(Prayer: Civil Miscellaneous Appeal filed under Section 37(1) and (2) of Arbitration and Conciliation Act, 1996, to set aside the order made in Arbitration OP No.1 of 2010 on the file of the Principal District Judge, Vellore dated 08.06.2018.)

P. Velmurugan, J.

1. This Civil Miscellaneous Appeal has been filed to set aside the order made in Arbitration O.P No.1 of 2010 on the file of the Principal District Judge, Vellore dated 08.06.2018.

2. The learned counsel for the appellant submitted that the appellant is the beneficiary/requisitioning body. The learned Principal District Judge traversed beyond the scope of Section 34 of the Arbitration and Conciliation Act (herein after “the Act”) and without any material, modified the award which exceeds his power. The learned Judge, while exercising his power under Section 34 of the Act to either set aside the award or to confirm the award, and has no power to award compensation. Therefore, the order passed by the learned Principal District Judge is liable to be set aside.

3. The learned counsel for the 1st respondent submitted that due to the acquisition, they were constrained to close the Effluent Treatment plant and no award was granted on the loss. Therefore, they invoked arbitration clause, but the learned Arbitrator failed to consider the same. Hence, they filed an application under Section 34 of the Act, since no award was passed for the loss caused due to the closure of the plant and the learned Judge rightly awarded compensation. In a similar case, the Hon’ble Supreme Court has confirmed the award passed by the learned Principal District Judge and the said proposition can be adopted in this case.

4. Heard and perused the materials available on record.

5. Admittedly, the 2nd respondent initiated acquisition proceedings and the competent authority, after completion of acquisition proceedings, passed an award. Aggrieved by the same, the 1st respondent filed a claim application before the 3rd respondent, who is the statutory arbitrator. But the 3rd respondent dismissed the claim application by confirming the order of the 2nd respondent. According to the appellant, neither in the claim petition made before the 2nd respondent nor in the O.P. filed before the Principal District Judge, the requisitioning body was impleaded as party and without hearing the requisitioning body, the learned Principal District Judge passed the award exceeding his jurisdiction as well as the scope and object of Section 34 of the Act.

6. A reading of the materials would show that the requisitioning body was not impleaded as party in the O.P. The learned Principal District Judge has only enhanced the award, which is beyond the scope and object of Section 34 of the Act. If at all the Principal District Judge found any procedural unfairness, conflict with public policy or patent illegality, he ought to have set aside the award and remitted the matter back to the Arbitrator/District Collector to reconsider the same and he cannot enhance the award. While exercising jurisdiction under Section 34 of the Act, the learned Judge cannot sit in the arm chair of the appellate Court and re-appreciate the factual matrix and give independent findings which are beyond the scope and object of Section 34 of the Act.

7. Under these circumstances, this Court finds that the appellant/requisitioning body was not added as a party in the arbitration O.P. and the learned Principal District Judge has traversed beyond the scope of Section 34 of the Act. Therefore, the order passed by the learned Principal District Judge in the Arbitration OP is liable to be set aside.

8. Accordingly, the order passed by the learned Principal District Judge, Vellore in the Arbitration O.P No.1 of 2010 dated 08.06.2018 is set aside and the matter is remitted back to the 3rd respondent.

9. Since the acquisition is of the year 2002, the 3rd respondent/District Collector is directed to issue notice to the appellant/requisitioning body and also to the respondents and after hearing the parties afresh, dispose of the case on merits and in accordance with law within a period of four months from the date of receipt of a copy of this order.

10. With the above direction, this Civil Miscellaneous Appeal is disposed of. Consequently, the connected Miscellaneous Petitions are closed. No costs.
 
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