The Court Exercising Power Under Section 34 of the Arbitration Act Cannot Modify or Review an Award.

The National Highways Authority of India (NHAI) acquired lands belonging to the respondents for a four-lane project at Devagiri-Yellapur village

Dissatisfied with the compensation awarded by the competent authority, the landowners initiated arbitration. The Arbitrator enhanced the compensation to ₹346 per sq. ft.

NHAI challenged these awards under Section 34 of the Arbitration and Conciliation Act, 1996, before the Principal District and Sessions Judge, Haveri. On May 22, 2023, the Trial Court initially confirmed the Arbitrator’s awards

However, the landowners subsequently filed Review Petitions, leading the Trial Court to modify the Arbitrator's award on January 30/31, 2024

NHAI appealed these modifications under Section 37 of the Act.

1. Whether a Court exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996, has the power to modify or revise an arbitral award

2. Whether the Trial Court can review and modify its own judgment passed in a Section 34 petition to alter the compensation rate

Section 34 of the Arbitration and Conciliation Act, 1996, which limits judicial interference to setting aside an award or remanding the matter, rather than modifying it on merits

Supreme Court precedent in Project Director, NHAI v. M. Hakeem, which established that Section 34 does not empower courts to "modify, revise or vary" an award

Principles from Gayathri Balaswamy v. M/s ISG Novasoft Technologies Ltd., noting that Section 151 of the CPC cannot be used to circumvent Section 34’s limitations

S.V. Samudram v. State of Karnataka, which characterized modification of an award as "crossing the Lakshman Rekha"

The High Court observed that the Trial Court exceeded its statutory mandate by modifying the Arbitrator's award through a review petition

Applying the M. Hakeem doctrine, the Court reasoned that the 1996 Act—unlike the 1940 Act—was designed to minimize judicial intervention; therefore, a judge cannot "put himself in the shoes of Parliament" to read a power of modification into Section 34 that was explicitly omitted

The court noted that while clerical or typographical errors may be corrected, any substantive change to the compensation rate constitutes an impermissible modification

Since the Trial Court moved beyond confirming or setting aside the award to actively altering the quantum of compensation, its judgment was found to be patently illegal and in violation of the fundamental policy of Indian law

The High Court set aside the impugned revised judgments dated January 30/31, 2024, and remanded the matters back to the Trial Court for fresh consideration in accordance with the law