The Supreme Court today held that courts cannot modify an award passed under Section 34 of the Arbitration and Conciliation Act, 1996 (Project Director, NHAI v. M Hakeem)..While doing so, the Bench of Justices Rohinton Fali Nariman and BR Gavai dismissed all appeals pertaining to the case. .A Division Bench of the Madras High Court had disposed of a large number of appeals filed under Section 37 of the said Act laying down that at least insofar as arbitral awards made under the National Highways Act, 1956 are concerned, Section 34 of the Arbitration Act must be so read as to permit modification of an arbitral award made under the National Highways Act so as to enhance compensation awarded by an arbitrator..The Centre had approached the top court in appeal against the judgment..The Supreme Court held that to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award "would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the UNCITRAL Model Law on International Commercial Arbitration, 1985." .The top court held that the parliament very clearly intended that no power of modification of an award exists in Section 34 of the Arbitration Act, 1996. "It is only for parliament to amend the aforesaid provision in the light of the experience of the courts in the working of the Arbitration Act, 1996, and bring it in line with other legislations the world over," the judgment said..Solicitor General Tushar Mehta, appearing for the National Highways Authority of India (NHAI), had stated that the scope of enquiry under Section 34 was extremely limited in nature and consequently, inhibited adjudication on the basis of documents.“Despite the positive finding, u/s 34(2) requiring setting aside of the award, the court cannot conduct an adjudicatory exercise to arrive at a different conclusion due to the very nature of the remedy of Section 34 itself,” SG Mehta had argued..A bare perusal of Section 34 leaves no room for doubt that there is no power vested by the statute to the supervisory court to alter, vary, interfere or entertain any kind of challenge against an award passed by an arbitrator in accordance with the 1996 Act, the Solicitor had submitted. .The Supreme Court dismissed the appeals by the Centre since it was brought to light that an arbitral awards in these cases were given by a government servant appointed by the Central Government, "the result being the rubber stamping of compensation awarded on a completely perverse basis". ."Given the fact that, in these petitions at least, the constitutional validity of the NH Amendment Act, 1997 has not been challenged, we must proceed on the basis that grave injustice would be done if we were to interfere on facts, set aside the awards and remand the matter to the very government servant who took into account depressed land values which were relevant for purposes of stamp duty only," held the top court while dismissing the appeals by NHAI..On January 18 this year, a Bench of Justices Nariman, KM Joseph and Ajay Rastogi had issued notice on the pleas challenging the Madras High Court order passed by the Madras High Court Bench of Justices TS Sivagnanam and R Tharani on February 13, 2020..SG Mehta, assisted by advocates PV Yogeshwaran, Rajat Nair and Kanu Agrawal, appeared for NHAI. The respondents were represented by Senior Advocate R Balasubramanian..[Read Judgment]
