- 1 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF SEPTEMBER, 2025 PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE AND THE HON'BLE MR. JUSTICE C M JOSHI MISCELLANEOUS FIRST APPEAL NO. 5962 OF 2025 (AA) BETWEEN: 1. MRS. DAYAVATHI D/O MR. MONAPPA KUNDER @ MONAPPA KORAGA MADIVALA AGED ABOUT 62 YEARS R/AT NO.16-57 NEAR MANGALA PETROL PUMP MUKKA, MANGALURU - 574 146 2. MRS. SUMITHRA W/O MR. SHRINIVASA MADIVALA AND D/O MR. MONAPPA KUNDER @ MONAPPA KORAGA MADIVALA AGED ABOUT 58 YEARS R/AT NO.1-10, LINGA SADANA NILAYA PEJAMANGOOR, KOKKARNE UDUPI - 576 234 3. MR. SHEKARA SALIAN S/O MR. MONAPPA KUNDER @ MONAPPA KORAGA MADIVALA AGED ABOUT 58 YEARS R/AT 16-57, NEAR MANGALA PETROL PUMP MUKKA, MANGALURU - 574 146 4. MR. DHANANJAYA SALLIAN S/O MR. MONAPPA KUNDER @ MONAPPA KORAGA MADIVALA Digitally signed by AMBIKA H B Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 AGED ABOUT 54 YEARS R/AT NO.16-57 NEAR MANGALA PETROL PUMP MUKKA, MANGALURU - 574 146 5. MRS. HARINAKSHI W/O MR. HARISH SHRIYAN D/O MR. MONAPPA KUNDER @ MONAPPA KORAGA MADIVALA AGED ABOUT 52 YEARS R/AT NO.2-137/1, GURUNAGAR NEAR NARAYANA GURU MANDIRA MARYHILL, KONCHADY MANGALURU - 575 008 6. MRS. VISHALAKSHMI S PUTHRAN W/O MR. SURESH PUTHRAN AND D/O MR. MONAPPA KUNDER @ MONAPPA KORAGA MADIVALA AGED ABOUT 46 YEARS R/AT NO.401, SAI DEEP CHS ANAND NAGAR, OPP. RK INN HOTEL MIRA ROAD, THANE MAHARASHTRA - 401 107 APPELLANTS No.1, 2, 4 TO 6 REPRESENTED BY GPA HOLDER APPELLANT NO.3 …APPELLANTS (BY SRI. SACHIN B S, ADVOCATE) AND: 1. THE SPECIAL LAND ACQUISITION OFFICER AND COMPETENT AUTHORITY NATIONAL HIGHWAYS KUNDAPUR-SURATHKAL SECTION NEAR MINI VIDHANA SOUDHA OPP. TOWN HALL HAMPANKATTA MANGALORE - 575 001 2. NATIONAL HIGHWAYS AUTHORITY OF INDIA PROJECT IMPLEMENTATION UNIT - 3 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 THARETHOTA MANGALORE - 575 002 REPRESENTED BY ITS PROJECT DIRECTOR 3. THE ARBITRATOR AND DEPUTY COMMISSIONER DAKSHINA KANNADA DISTRICT NEAR HAMILTON CIRCLE MANGALORE - 575 001 …RESPONDENTS THIS MISCELLANEOUS FIRST APPEAL IS FILED UNDER SECTION 37(1)(C) OF THE ARBITRATION AND CONCILIATION ACT, AGAINST THE ORDER DATED 20.01.2025 PASSED IN A.P.NO.190/2022 ON THE FILE OF THE I ADDITIONAL DISTRICT AND SESSIONS JUDGE, MANGALURU, DECREEING THE PETITION FILED UNDER SECTION 34 OF ARBITRATION AND CONCILIATION ACT. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE and HON'BLE MR. JUSTICE C M JOSHI ORAL JUDGMENT (PER: HON'BLE MR. VIBHU BAKHRU,CHIEF JUSTICE) 1. The appellants have filed the present appeal under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 [the A&C Act] impugning a judgment dated 20.01.2025 rendered in A.P Nos.181/2022 and 190/2022 [impugned judgment] passed by the - 4 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 I Additional District and Sessions Judge, Mangaluru [Trial Court]. The appellants are aggrieved by the impugned judgment insofar as it relates to A.P No.190/2022. The appellants had filed the said application under Section 34 of the A&C Act impugning an arbitral award dated 21.09.2022 [impugned award]. 2. The grievance of the appellants is that the impugned award has been set aside in its entirety and is not confined to the findings which are against the appellants. In other words, the appellants claim that any re-initiation of arbitral proceedings must necessarily be confined only to the findings of the Arbitral Tribunal which were against the appellants. 3. The dispute in the present appeal arises in the following context: The appellants are the owners of land measuring 485.50 sq. mts. falling in Survey No.243/2B in Surathkal Village, Mangaluru Taluk, Dakshina Kannada District [the subject land]. The subject land was acquired under Section 3 of the National Highways Act, 1956 [the NH Act]. The compensation for the said land was fixed at `1,168/- per sq. mt. treating the subject land as agriculture land. - 5 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 It was the appellants' case that the subject land was located by the side of the National Highway within the limits of Mangaluru City Corporation. The appellants claimed that the market value of the said land is more than `21,000/- per sq. mtr. at the time of fixation of compensation and the compensation as determined was "arbitrary, baseless and improper". Accordingly, the appellants raised disputes which were referred to arbitration under Section 3-G(5) of the NH Act. 4. The learned Arbitrator framed the following four points for consideration: "1. Has the 2nd Respondent acquired the land and passed the compensation award by following due procedures? 2. Is the compensation fixed by the 2nd Respondent just and reasonable? 3. Whether the Applicant is entitled for compensation at the rate of converted land? 4. If so, what order?" 5. In regard to the first issue, the Arbitral Tribunal found that the compensation had been awarded by following due procedures. However, insofar as the quantum of compensation is concerned, the learned Arbitrator found that it is below the market value. The - 6 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 Arbitral Tribunal found merit in the appellants' contention that the compensation fixed for the subject land was less than reasonable. The Arbitral Tribunal also noted that the district of Dakshina Kannada with Mangaluru city as its headquarters is densely populated and is one of the fastest growing districts. Therefore, the availability of land is scarce. Additionally, it was also observed that the subject land had acquired good potential for future development. Accordingly, the Arbitral Tribunal enhanced the compensation to `3,13,600/- per cent. Dissatisfied with the said fixation of compensation, the appellants had preferred the application under Section 34 of the A&C Act to set aside the award. 6. The learned court found merit in the challenge and set aside the impugned award, inter alia, on the ground that it contained no reasons to support the conclusion. The learned Trial Court also faulted the Arbitral Tribunal for not considering that the subject land measured approximately 12 cents and was located in an urban area. And, adverting to the guideline values issued by the Sub- Registrar, Mukka. - 7 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 7. We find no merit in the contention that the learned Trial Court ought to have remanded the matter to the Arbitrator limited only for enhancement beyond the rate fixed by the Arbitrator in the impugned award. 8. The learned court's finding is that the impugned award is not supported by reasons. In view of the said finding, there is no question of sustaining any part of the impugned award. It is well settled that it is not permissible for the Trial Court to re-adjudicate the disputes that are referred to arbitration. The scope under Section 34 of the A&C Act is essentially limited to determining whether the impugned award is required to be set aside on the ground as set out in Section 34 of the A&C Act. In a recent decision in Gayatri Balasamy v. ISG Novasoft Technologies Limited: 2025 INSC 605, the Supreme Court has permitted modification of the award to a limited extent. However, in the present case, there is no scope for modification or partial setting aside of the impugned award given the reason for which the same has been set aside. Therefore, the learned court had rightly set aside the same. - 8 - HC-KAR NC: 2025:KHC:34070-DB MFA No. 5962 of 2025 9. The present appeal is unmerited and, accordingly, dismissed. 10. Pending application also stands disposed of. Sd/- (VIBHU BAKHRU) CHIEF JUSTICE Sd/- (C M JOSHI) JUDGE AHB List No.: 1 Sl No.: 46