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2020 DIGILAW 567 (UTT)

Basant Kumar Consul v. Union of India

2020-12-17

SHARAD KUMAR SHARMA

body2020
JUDGMENT : Sharad Kumar Sharma, J. (Via Video Conferencing) 1. The petitioners have filed this present writ petition praying for an appropriate direction to the District Judge, Nainital, to entertain his application which has been preferred by him under Section 34 of the Arbitration and Conciliation Act, 1996, which they intended to prefer being aggrieved as against the Arbitral award dated 03.09.2020, which was rendered in Arbitration Application No. 51/18 of 2018-19, which was rendered by the Arbitrator, while exercising his powers under Section 3-G(5) of the National Highway Act of 1956. As far as the provisions contained under Section 3-G(5) of the National Highways Act, 1956, is concerned, that it is the authority of the Arbitrator, which is, vested in him pertains to an aspect of determination of an appropriate and 'adequate compensation', which would be payable to the land looser, whose land has been acquired by the National Highway Authority, for its various projects, for which the notification has been issued under the National Highways Act 1956, as contained in its Section 3 D. For ready reference Section 3 G of the Act of 1956 is extracted as under:- "[3G. Determination of amount payable as compensation.-(1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by an order of the competent authority. (2) Where the right of user or any right in the nature of an easement on, any land is acquired under this Act, there shall be paid an amount to the owner and any other person whose right of enjoyment in that land has been affected in any manner whatsoever by reason of such acquisition an amount calculated at ten per cent of amount determined under sub-section (1), for that land. (3) Before proceeding to determine the amount under subsection (1) or sub-section (21), the competent authority shall give a public notice published in two local newspapers, one of which will be in a vernacular language inviting claims from all persons interested in the land to be acquired. (3) Before proceeding to determine the amount under subsection (1) or sub-section (21), the competent authority shall give a public notice published in two local newspapers, one of which will be in a vernacular language inviting claims from all persons interested in the land to be acquired. (4) Such notice shall state the particulars of the land and shall require all persons interested in such land to appear in person or by an agent or by a legal practitioner referred to in subsection (2) of section 3C, before the competent authority, at time and place and to state the nature of their respective interest in such land. (5) If the amount determined by the competent authority under sub-section(1) or sub-section (2) is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the arbitrator to be appointed by the Central Government. (6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act. (7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub-section (5), as the case may be, shall take into consideration- (a) the market value of the land on the date of publication of the notification under section 3A; (b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land; (c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings; (d) if, in consequences of the acquisition of the land, the person interest is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change.]" 2. The grievance of the petitioners is that as against the said award dated 03.09.2020 when they approached the Tribunal, under Section 34 of the Arbitration and Conciliation Act, 1996, the Tribunal has declined to entertain their application and hence they approached this Court by filing the writ petition for the following reliefs:- "I. To issue suitable directions to the District Judge Nainital to entertain the application U/s. 34 of Arbitration and Conciliation Act, which is to be filed by the petitioner against the judgment and award passed by the Arbitrator (Collector of Nainital), dated 03.09.2020 in Arbitration Application No. 51/18 of 2018-19, under Section 3-G(5) of the National Highways Act-1956. II. Any other relief which this Hon'ble Court may deem fit for proper, may kindly be awarded in favour of the petitioner and against the respondents. III. Award the cost of the petition in favour of the petitioner and against the respondents." 3. Their grievance was also to the effect that the denial made by the District & Sessions Judge in entertaining their application under Section 34 of the Act of 1996, was on an administrative side, by an oral order because no judicial order as such was passed on the application which was preferred by the petitioners before the District & Sessions Judge, Nainital under Section 34 of the Act. Hence, this Court by an order dated 15.12.2020, called for a reply from the District Judge and in compliance thereto, the District Judge has submitted his reply on 16.12.2020. In the reply thus given by the District Judge, he has observed that since the reference sought under Section 34 of the Arbitration and Conciliation Act before him by the petitioners pertained to a claim of an amount over and above Rs. 3.00 lacs., as quantified therein, hence as per his wisdom, he has observed that in view of the notification issued by the Registrar General of this Court vide his Letter No. 1387-XVII/2003/Admin A/2017 dated 13.03.2019, it has been directed that all the matters which were pending before the District & Sessions Judge and which also falls to be within the ambit and the scope of the provisions contained under Section 15(2) of the Commercial Courts Act, they were required to be transferred to the Commercial Courts thus constituted under the Act itself. The reply thus extended by the District Judge, Nainital widely gave the following reply:- (1) That counsel for the petitioner had placed the application under Section 34 of Arbitration and Conciliation Act, 1996 in the Drop Box, which was placed before me by Sadar Munsarim. As the matter relates to Section 34 of Arbitration and Conciliation Act pertaining to the valuation of Rupees more than 3 lakhs. The Registrar General of Hon'ble High Court had issued a letter No. 1387/XVII/2003/Admin.A/2017 dated March 13, 2019, in which it is directed that all the cases pending in the Courts relating to commercial disputes of a specified value will be transferred to Commercial Court that has been established at Dehradun in accordance with the provision of Section 15 (2) of Commercial Courts Act, 2015. (2) That in the light of Section 15(2), it is clearly mentioned that all the suits and applications including applications under Arbitration and Conciliation Act, 1996, relating to a commercial dispute of a specified value pending in any Civil Court in any District area in respect of which a Commercial Court has been constituted, shall be transferred to such Commercial Court. (3) That by way of Ordinance dated 03.05.2018, the specified value has been reduced to Rs. 3 lakhs. So, in this way after the establishment of Commercial Court at Dehradun, the cases relating to specified value of more than Rs. 3 lakhs may be heard by the Commercial Court, Dehradun. (4) That the Court is not empowered to hear the cases beyond the specified value of Rs. 3 lakhs, so the application under Section 34 of Arbitration and Conciliation Act of the petitioner was returned to the counsel to file his application under Section 34 of Arbitration and Conciliation Act to the appropriate Court i.e. Commercial Court, Dehradun. (5) That Proviso II of Section 3 of Commercial Courts Act, 2015, specified such pecuniary value which shall not be less than Rs. 3 lakhs. So, in the light of above provision, the cases having value of more than Rs. 3 lakhs will only be entertained by the Commercial Court, established at Dehradun and only the Commercial Court has jurisdiction to hear such matters. 3 lakhs. So, in the light of above provision, the cases having value of more than Rs. 3 lakhs will only be entertained by the Commercial Court, established at Dehradun and only the Commercial Court has jurisdiction to hear such matters. Therefore, due to the above reasons, the application of the petitioner under Section 34 of Arbitration and Conciliation Act was returned to the petitioner with the direction that this Court has not jurisdiction to consider this case. As such, the application was taken back by the counsel of petitioner, so a judicial order could not be passed on such application. Submitted for kind perusal." 4. Hence, taking the said perspective and in the light of the Proviso 2 to Section 3 of the Commercial Courts Act, the District & Sessions Judge has replied that it is on account of those circulars and the implications of Section 15(2) to be read with Section 3, the second proviso to it; he has returned the application of the petitioners, which was filed under a statute under Section 34 of the Act of 1996, without entertaining the same on the pretext that the District & Sessions Judge has got no jurisdiction to consider the said application. 5. When the matter was taken up today and on considering the reply which had been extended by the District & Sessions Judge on 16.12.2020, this Court is of the view that even for the time being, it is presumed that there was any restrictions imposed by the provisions contained under the Commercial Courts Act (though none), the District & Sessions Judge, could not have declined, to atleast entertain an application under Section 34 of the Act of 1996 and by an oral refusal to entertain, should have passed a judicial order holding thereof for his own reasons to be assigned in it as to why the proceedings are not maintainable. Since he was exercising judicial powers, the refusal could be only by a judicial order and not by an administrative or executive order and that too without any reasons. Since he was exercising judicial powers, the refusal could be only by a judicial order and not by an administrative or executive order and that too without any reasons. He could not have refused to accept the said application, on an administrative side and that too without passing any judicial order on it, even if at all, there was a bar created by the Commercial Courts Act of 2015, because the statutory proceedings under an Act cannot be governed by the administrative directions issued by the Courts because administrative direction cannot be permitted to regulate a judicial proceedings of a court, which have contemplated under a statute and more particularly when it is a central statute. The District Judge was not expected to act, in a manner like any other government offices acts. 6. Apart from it, the argument of the learned counsel for the petitioners is that if the ambit and scope of the Commercial Courts Act itself is taken into consideration, particularly in the light of the SOR of the said Act, which provided for an speedy disposal of "high value commercial disputes", which are under consideration before the Government for quite a long time and an independent Tribunal has been constituted to deal with such commercial cases. The Commercial Tribunal, which has been created therein has been given an scope of power with regards to 'commercial dispute' as it has been defined under Sub Section (c) of Section 2 of the Act, which is detailed hereunder:- "2(c) "commercial dispute" means a dispute arising out of-- (i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents; (ii) export or import of merchandise or services; (iii) issues relating to admiralty and maritime law; (iv) transactions relating to aircraft, aircraft engines, aircraft equipment and helicopters, including sales, leasing and financing of the same; (v) carriage of goods; (vi) construction and infrastructure contracts, including tenders; (vii) agreements relating to immovable property used exclusively in trade or commerce; (viii) franchising agreements; (ix) distribution and licensing agreements; (x) management and consultancy agreements; (xi) joint venture agreements; (xii) shareholders agreements; (xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services; (xiv) mercantile agency and mercantile usage; (xv) partnership agreements; (xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits; (xviii) agreements for sale of goods or provision of services; (xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance; (xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government. Explanation.--A commercial dispute shall not cease to be a commercial dispute merely because-- (a) it also involves action for recovery of immovable property or for realisation of monies out of immovable property given as security or involves any other relief pertaining to immovable property; (b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions; (d) "Commercial Division" means the Commercial Division in a High Court constituted under sub-section (1) of section 4; (e) "District Judge" shall have the same meaning as assigned to it in clause (a) of article 236 of the Constitution of India; (f) "document" means any matter expressed or described upon any substance by means of letters, figures or marks, or electronic means, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter; (g) "notification" means a notification published in the Official Gazette and the expression "notify" with its cognate meanings and grammatical variations shall be construed accordingly; (h) "Schedule" means the Schedule appended to the Act; and (i) "Specified Value", in relation to a commercial dispute, shall mean the value of the subject-matter in respect of a suit as determined in accordance with section 12 1 [which shall not be less than three lakh rupees] or such higher value, as may be notified by the Central Government. (2) The words and expressions used and not defined in this Act but defined in the Code of Civil Procedure, 1908 (5 of 1908) and the Indian Evidence Act, 1872 (1 of 1872), shall have the same meanings respectively assigned to them in that Code and the Act." 7. On a judicial scrutiny of the nature of dispute which are enumerated and has been included in Sub Section (c) of Section 2 of the Act to define commercial dispute, the nature of the dispute, which was sought to be referred before the District & Sessions Judge, under Section 34 of the Arbitration and Conciliation Act of 1996, which is exclusively deals with the Arbitral powers which were exercise by the Arbitrator, which has been assigned with the jurisdiction under Section 3-G of National Highways Act of 1956. Hence, the Arbitrator, who was exercising the powers under the said Act was not dealing with any 'commercial dispute' and particularly any dispute, which fall to be within the ambit of Sub Section (c) of Section 2 of the Commercial Courts Act and hence in view of the matter, when it was not a commercial dispute, rather it entails a determination of an appropriate compensation, which was to be made payable to the petitioners, as a consequence of the award rendered by the Arbitrator for acquisition of his land under Section 3 D of the Act of 1956, I am of the view that it will to be cognizable by the District & Sessions Judge himself and not by the Commercial Courts created under the said Act, as the nature of dispute sought to be raised before him was not a Commercial Dispute, defined under the Act. 8. The counsel for the respondents very fairly, has submitted that the said issue, was also dealt with by yet another Coordinate Bench of this Court in Writ Petition No. 327 of 2020 (M/S), which stood adjudicated by the judgment of 11.03.2020, where an identical view has been expressed by the Coordinate Bench, that a dispute arising out of an Arbitral award falling within the ambit of the National Highways Act of 1956; will not be a commercial dispute, which would be made cognizable by the Commercial Court, but rather it would be cognizable by the District Judge, under Section 34 of the Act and hence, reply given by the District Judge is not satisfactory, apart from being procedurally faulted, and being dehors to the judicial proceeding, which the District Judge ought to have considered and passed an order on judicial side and not by an executive or administrative orders. Hence, the writ petition is allowed. A writ of mandamus is issued to the District Judge, Nainital, to entertain the application of the petitioners under Section 34 of the Arbitration and Conciliation Act of 1996, which he intends to prefer against the Arbitral award dated 03.09.2020, as detailed above and proceed to pass an appropriate order in accordance with law. 9. Subject to the above, the writ petition stands allowed.