Union of India Vs. M/S. Banwari Lal & Sons (P) Ltd  Insc 247 (12 April 2004)
Sinha. S.B. Sinha, J :
the quantum of damages should be calculated by an arbitrator for occupation of
a property by the appellant herein pursuant to or in furtherance of
notification issued under the provisions of the Land Acquisition Act which was
declared illegal is the short question involved in this appeal.
premise in question admeasuring 50,328 sq. ft. is situated at 6, Ansari Road, Darya Ganj. It was requisitioned
by Delhi Administration under the provisions of Requisition and Acquisition of
Immovable Property Act, 1952. The said Act lapsed on 10th March, 1987. A notification was issued under
Section 4 of the Land Acquisition Act for acquisition of the entire property on
6th March, 1987 whereafter a declaration purported to be in terms of Sections 6
and 17 thereof was issued on 10th March, 1987. The said notification was set
aside by the High Court by a judgment dated 04.02.1991 on a writ petition filed
by the Respondent herein.
High Court while quashing the said acquisition proceeding appointed Justice
T.V.R. Tatachari as an arbitrator to determine the damages payable by the Delhi
Administration for occupation of the said property. It is not in dispute that
this Court while permitting the appellant to remain in possession upto
31.03.1993 directed it to hand over vacant possession on or before the said
date. It was, however, clarified that the arbitrator appointed by the High
Court may give his award and file the same in the High Court for appropriate
if the contention of the appellant to the effect that its possession in
relation to property in question was not of a trespasser is not accepted; what
should be the reasonable amount of damages for occupation thereof was the
question required to be determined by the Arbitrator. The learned Arbitrator
posed unto himself a correct question when he said:
has to be remembered that the income a private property would fetch by being
let out, is not a fixed and rigid figure, but would depend upon various factors
such as the need and urgency of the lessee, the bargaining ability of the lessor,
the prevailing competition in the locality and the like." The learned
Arbitrator passed a reasoned award. Before the Arbitrator parties adduced
evidences. As many as 16 issues were framed by the Arbitrator. The learned
arbitrator was also required to determine a question as regard status of the
appellant herein vis-`-vis the said property upon delivery of the judgment of
the High Court dated 4.2.1991 declaring the acquisition proceedings to be
illegal on the ground that Section 17 of the Land Acquisition Act could not
have been taken recourse to.
now well settled that when a question of law is referred to the arbitrator the
award cannot be set aside only if a different view is possible.
it is also trite that if no specific question of law is referred, the decision
of the Arbitrator on that question would not be final, however much it may be
within his jurisdiction and indeed essential for him to decide the question
incidentally. Only in a case where specific question of law touching upon the
jurisdiction of the arbitrator was referred for determining his jurisdiction by
the parties, then the finding of the arbitrator on the said question between
the parties may be binding. (See Rajasthan State Mines & Commission [(2003) 8 SCC 593]) It is also trite
that where the award contains reasons, the same may be interfered, inter alia,
when it is based on a wrong proposition of law.
when the view of the arbitrator is a plausible one, the Court would not
questions raised in this appeal are required to be considered keeping in view
the aforementioned legal principles. Correct determination of the quantum of
damages by the arbitrator would depend upon application of the correct
principles therefor. The authorities on valuation of property lay down such
principles. It has not been shown that the learned Arbitrator in determining
the quantum of damages adopted any known or accepted principle of valuation.
Determination of quantum of damages would depend upon the fact of the matter as
also the terms of the contract and other Sumangal Services Pvt. Ltd., 2003 (8)
SCALE 424) SCC 154], this Court in no uncertain terms held that the arbitrator
cannot act arbitrarily, irrationally, capriciously or independent of the
contract. It was further opined:
lies a clear distinction between an error within the jurisdiction and error in
excess of jurisdiction. Thus, the role of the arbitrator is to arbitrate within
the terms of the contract. He has no power apart from what the parties have
given him under the contract. If he has travelled beyond the contract, he would
be acting without jurisdiction, whereas if he has remained inside the parameter
of the contract, his award cannot be questioned on the ground that it contains
an error apparent on the face of the records." The decision of this Court
in Bharat Coking Coal Ltd. (supra) was Supply & Drainage Board [2003 (9)
SCALE 769] where it was emphasised that the arbitrator while making his award
cannot ignore very material and relevant documents relevant for determining the
controversy so as to render a just and fair decision.
further trite that an arbitrator cannot clothe himself with the jurisdiction
when it has none.
learned Arbitrator did not adopt any known method of valuation of the property,
it must be held that while making the award he applied a wrong principle of law
and, thus, the same cannot be sustained.
the aforementioned reasons, I respectfully concur with the judgment and order
proposed to be delivered by Brother Kapadia, J.