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2013 DIGILAW 1048 (PAT)

Sheo Prasad Singh v. State of Bihar

2013-08-26

RAMESH KUMAR DATTA

body2013
ORDER 1. Heard learned counsel for the petitioners and learned counsels for the State and for the Dedicated Freight Corridor Corporation of India Limited. 2. The petitioners seek quashing of the order dated 19.5.2012 passed by respondent No. 2, the Commissioner, Patna Division by which he has cancelled the award dated 30.3.2011 passed by the District Land Acquisition Officer, Kaimur at Bhabua and re-determined the valuation of the acquired lands of the petitioners for constructing the Special Rail Project Corridor at Karma under Anchal Kudra, District Bhabua and directed the respondent No. 4 to prepare a fresh award in the light of the order passed by respondent No. 2 reducing the amount and for consequential reliefs. 3. Briefly stated the facts of the case are that the respondents initiated proceedings for acquisition of the lands of the petitioners for constructing the aforesaid Special Rail Project Corridor under the provisions of the Railways Act. The respondent No. 4 as the competent authority under the statutory provisions gave his award on 30.3.2011. Unknown to the petitioners the respondent Railway being aggrieved by the amount determined approached the Commissioner, Patna Division under Section 20-F(6) of the Railways Act as the Arbitrator appointed by the Central Government in the matter, but the petitioners were not even informed of the fact that the Railway had approached the Commissioner. The Commissioner, Patna Division also did not issue any notice to the petitioners. The fact that no notice was issued to the petitioners by the Commissioner and without issuing any notice to the petitioners and without providing them an opportunity of hearing and behind the back of the petitioners the Commissioner passed his award dated 19.5.2012 has not been denied in the counter affidavit filed on behalf of respondent Nos. 3 & 4, despite specific direction of this Court to answer the said point. Being aggrieved by the same the petitioners had filed representation before the Commissioner which was rejected. 4. Learned counsel for the petitioners submits that the order/award of the Commissioner is fit to be set aside on the sole ground of violation of principles of natural justice. 5. Being aggrieved by the same the petitioners had filed representation before the Commissioner which was rejected. 4. Learned counsel for the petitioners submits that the order/award of the Commissioner is fit to be set aside on the sole ground of violation of principles of natural justice. 5. Learned counsel for the respondents, on the other hand, argues that the arbitral award can only be set aside in terms of the provisions of Section 34 of the Arbitration and Conciliation Act, 1996 and one of the specific grounds for setting aside the award stated in the said Section is that the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings. It is submitted that the challenge to the award could have been made only within a period of three months from the receipt of the arbitral award and in any case not beyond the further period of 30 days if specific cause was shown. It is the stand of the respondents that the petitioners having allowed the statutory remedy to be barred by the passage of time cannot be permitted to raise the said issue in the present writ application. 6. It is true that in so far as the arbitral proceedings under Chapter 4A of the Railways Act are concerned, the said proceedings have been specifically stated to be governed by the provisions of the Arbitration and Conciliation Act. It is also true that one ground specifically mentioned for setting aside the arbitral award under Section 34(2)(a)(iii) of the Arbitration and Conciliation Act is that the party making the application for setting aside the award did not have notice of the arbitral proceedings. Although the said ground has been specifically stated in Section 34 but as a matter of fact in view of the principles of natural justice being a basic requirement of any fair adjudication proceeding it is evident that the said ground would be available to any party whether the same had been mentioned in Section 34 or not. 7. It has also been held by this Court that failure to comply with the principles of natural justice renders the action of any court or quasi judicial tribunal as without jurisdiction and the same can be set aside by this Court in exercise of its power under Article 226 of the Constitution. 7. It has also been held by this Court that failure to comply with the principles of natural justice renders the action of any court or quasi judicial tribunal as without jurisdiction and the same can be set aside by this Court in exercise of its power under Article 226 of the Constitution. It is an established proposition that merely because alternative statutory remedy is available it does not have the effect of ousting the jurisdiction under Article 226 of the Constitution and this Court would interfere where it is found that the order or award is without jurisdiction or has been passed in violation of the principles of natural justice. Reference in this regard may be made to the case of Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & other, (1998) 8 SCC 1 . 8. In the present matter it is to be further considered that the petitioners before this Court are all villagers and since they were not even aware of the respondent Railway having invoked the arbitral clause and kept completely in the dark about the proceedings and as a matter of fact after waiting for a long time when the earlier award of the Land Acquisition Officer was not paid to them then only after applying under the Right to Information Act they could learn about the Commissioner’s order and thereafter they filed their representation before the Commissioner. 9. Learned counsel for the Dedicated Freight Corridor Corporation has further raised a plea that the writ application is not maintainable as the Arbitration and Conciliation Act is a complete Code and therefore any relief can only be obtained against the arbitral award under the provisions of the said Act and not by seeking to invoke extraordinary jurisdiction under Article 226 of the Constitution. In support of the same learned counsel relies upon a decision of the Supreme Court in the case of Smt. Rukmanibai Gupta vs. The Collector, Jabalpur and others, AIR 1981 SC 479 , in paragraph 10 of which it has been held as follows:- "10. Arbitration Act, 1940, is a self-contained and exhaustive code. It provides for filing arbitration agreement to the jurisdiction of court, appointment and removal of arbitrator by court, making award a rule of court, remitting or setting aside an award, etc. Where the arbitrator has made an award it can be questioned under S.33. Arbitration Act, 1940, is a self-contained and exhaustive code. It provides for filing arbitration agreement to the jurisdiction of court, appointment and removal of arbitrator by court, making award a rule of court, remitting or setting aside an award, etc. Where the arbitrator has made an award it can be questioned under S.33. Section 32 bars a suit on any ground whatsoever for contesting an award and further provides that no award shall be enforced, set aside, amended, modified or in any way affected otherwise than as provided in the Arbitration Act itself. Thus, Arbitration Act, 1940, is a self-contained exhaustive code. Relief sought by the appellant by invoking extraordinary jurisdiction of the High Court under Article 226 could have been obtained by proceeding in accordance with the relevant provisions of the Arbitration Act. In this situation, if the High Court declined to entertain the writ petition, no exception can be taken to it. Further the indenture of lease constitutes a contract between the parties. Right to excavate lime stone from leased area and obligation to pay royalty under the relevant Minor Mineral Rules arise from the contract. The contract provided for resolution of dispute arising out of the carrying out of contract. The writ jurisdiction of the High Court under Article 226 of the Constitution is not intended to facilitate avoidance of obligation voluntarily incurred (See Har Shankar vs. The Dy. Excise & Taxation Commissioner, (1975) 3 SCR 254 : AIR 1975 SC 1121 ." 10. Learned counsel further relies upon a decision of the Apex Court in the case of Hindustan Copper Limited vs. Nicco Corporation Limited, (2009) 6 SCC 69 . Learned counsel also cites another decision of the Apex Court in the case of State of Madhya Pradesh vs. Nerbudda Valley Refrigerated Products Company Private Limited and others, (2010) 7 SCC 751 for the proposition that where alternative remedy is available a writ application is not maintainable without exhausting such alternative remedy. 11. So far as the reliance by learned counsel for the respondent on the proposition laid down in Rukmanibai’s case (supra) is concerned, the proposition laid down therein is clearly distinguishable. 11. So far as the reliance by learned counsel for the respondent on the proposition laid down in Rukmanibai’s case (supra) is concerned, the proposition laid down therein is clearly distinguishable. The decision of the Apex Court was based on the proposition that the contract itself provided for resolution of dispute arising out of the carrying out of the contract and thus the Arbitration Clause would come into play and any action under the Arbitration Act, 1940 would have to be dealt with under the provisions of the said Act and the writ jurisdiction of the High Court under Article 226 could not be used to facilitate avoidance of obligation voluntarily incurred. Such is not the position in the present matter. In the present case which relates to acquisition of land there was no agreement between the parties containing an arbitration clause rather the provision for reference to arbitrator is statutory in nature and is available to any of the aggrieved parties under the Railways Act when the compensation for the acquisition has been fixed by the competent authority. In such circumstances, if one of the parties specially the Railways surreptitiously moves the Arbitrator who is the Divisional Commissioner under the State Government and without issuing notice or informing the persons whose lands have been acquired the Commissioner proceeds and makes the award then it cannot be said that interference of the writ jurisdiction in such circumstances, that too, at the behest of persons belonging to rural areas, would amount to facilitating avoidance of obligation voluntarily incurred. The action of the respondents in the present matter is so grossly irresponsible and contrary to fair play and justice that not to interfere with the same would mate out grave injustice to the parties, specially considering their circumstances and conditions. The proposition laid down in this regard in the aforesaid decisions would not apply to the facts of the present matter in the very different circumstances of an arbitration provided under the statutory provisions. The challenge to the maintainability of the writ application on the said count is therefore rejected. 12. In the said circumstances, I am of the view that it is a fit case that this Court should interfere in its writ jurisdiction under Article 226 of the Constitution. The challenge to the maintainability of the writ application on the said count is therefore rejected. 12. In the said circumstances, I am of the view that it is a fit case that this Court should interfere in its writ jurisdiction under Article 226 of the Constitution. The arbitral award having been admittedly passed in complete violation of the principles of natural justice, the Commissioner having treated it as an internal matter to be considered by him and his subordinates and the railway officials instead of deciding the matter after hearing both the parties, the same has to be set aside. The order dated 19.5.2012 of the Commissioner is, accordingly, quashed and the matter is remitted to the Commissioner, Patna Division as the Arbitrator for reconsidering and deciding the issue and passing a fresh order in accordance with law after complying with the procedure prescribed under the provisions of the Arbitration and Conciliation Act. 13. The writ application is, accordingly, allowed to the extent indicated above.