A public authority’s proven knowledge of arbitration defeats a technical objection to notice in setting aside an enhanced-compensation award.

The appellants sought enhancement of compensation for land acquired under the National Highways Act, 1956.

The statutory Arbitrator enhanced the compensation fixed by the competent authority.

The Project Director, National Highways Authority of India (NHAI), challenged the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996, contending that it had not received notice of the arbitration.

The Principal District Judge set aside the award on that ground.

In the Section 37 appeals, the appellants relied on the Arbitrator’s dispatch register, which recorded dispatch of notice to NHAI.

Whether the Section 34 court was justified in setting aside the arbitral award on the ground that NHAI had not been given notice or an opportunity to participate in the arbitration.

Whether the arbitral award should be affirmed where the dispatch register evidenced that notice had been sent to NHAI, although the notice was marked to it as a copy.

The Court considered Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, governing challenges to arbitral awards and appeals from orders under Section 34. It also considered the National Highways Act, 1956, under which the land was acquired and compensation determined, and Article 300A of the Constitution, which protects against deprivation of property except by authority of law.

The Court treated evidence of dispatch, together with the recipient’s failure to deny receipt or explain its non-participation, as relevant to whether the recipient had knowledge of the arbitration.

The Court found that the dispatch register evidenced that notice of the arbitral proceedings had been sent to NHAI. Although NHAI argued that it had only been marked a copy, it did not deny receipt or explain why it failed to participate despite having knowledge of the proceedings.

The Court also noted that the Section 34 court had not adequately considered the notice or the evidence of dispatch, and that no documents had been placed before it to support its finding that notice had not been issued.

In light of the acquisition and the appellants’ claim to enhanced compensation, the Court considered it inappropriate for a public authority to rely on that technical objection in the circumstances.

No costs were awarded, and the connected miscellaneous petitions were closed.