Research › Search › Judgment

Kerala High Court · body

2024 DIGILAW 1297 (KER)

National Highways Authority v. Reji Philip, S/o. Peter Philip

2024-10-10

NITIN JAMDAR, S.MANU

body2024
JUDGMENT : Nitin Jamdar, C. J. By these appeals, the Appellant – National Highways Authority of India (NHAI) has challenged the common judgment dated 17 May 2016 delivered by the learned Single Judge in W.P.(C) Nos. 29437 & 31306 of 2011 and W.P.(C) No. 27156 of 2012, setting aside the awards passed by the Arbitrator under the provisions of the National Highways Act, 1956 (Act 48 of 1956). 2. W.A. No. 1569 of 2016 is against the judgment delivered in W.P. (C) No. 29437 of 2011, W.A. No. 1574 of 2016 is against the judgment delivered in W.P.(C) No. 31306 of 2011 and W.A. No. 1576 of 2016 is against the judgment delivered in W.P(C) No. 27156 of 2012. The said writ petitions were filed by Respondent No.1/Original Petitioners. 3. The lands owned by the Original Petitioners situated at Vadakkancherry Village in Alathur Taluk were acquired by the Deputy Collector (Competent Authority), Land Acquisition for National Highways, Palakkad – Respondent No.3 in all the appeals, upon the requisition made by the NHAI under the provisions of the Act 48 of 1956 and awards were passed. Aggrieved by the inadequacy of the compensation awarded, the Writ Petitioners have filed applications before the Respondent No.2 – District Collector, Palakkad, (Arbitrator for Land Acquisition, National Highway), who found that the basis lands relied on and the acquired lands were not identical. 4. National Highways Act, 1956 is an Act to provide for the declaration of certain highways to be national highways and for matters connected therewith. Under Section 3-A of the Act, where the Central Government is satisfied that any land is required for the purpose of national highway, notification in the Official Gazette has to be issued. Therefore, under Section 3-C of the Act, any person interested in the land can submit objections in writing to the Competent Authority. 5. Section 3-D of Act 48 of 1956 provides for a declaration of acquisition. Thereafter, under Section 3-H of the Act, procedure for deposit and payment of amount is provided. Under Section 3-G of the Act, the methodology for determination of the amount payable as compensation is provided for. 5. Section 3-D of Act 48 of 1956 provides for a declaration of acquisition. Thereafter, under Section 3-H of the Act, procedure for deposit and payment of amount is provided. Under Section 3-G of the Act, the methodology for determination of the amount payable as compensation is provided for. Under sub-section (5) of Section 3-G, if the amount determined by the Competent Authority under sub-sections (1) and (2) is not acceptable to the parties, then upon application by the parties, the same has to be determined by the Arbitrator to be appointed by the Central Government. Sub-section (6) of Section 3-G provides that the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under the Act 48 of 1956. 6. The land of the Original Petitioner in W.P.(C) No. 29437 of 2011 admeasuring 0.1593 hectares out of 0.3682 hectares in Sy. No. 7/3 of No.3 – the Deputy Collector on requisition of the NHAI under the provisions of the Act 48 of 1956 and the Arbitrator passed an award granting an amount of Rs.8,55,230/- to the Original Petitioner. 7. The land of the Original Petitioner in W.P.(C) No. 31306 of 2011 admeasuring 0.2896 hectares out of 0.7268 hectares in Sy. Nos. 7/1, 7/3, 7/7 & 7/2 of Block No.45 of Vadakkanchery Village was acquired by the Deputy Collector on requisition of the NHAI under the provisions of the Act 48 of 1956 and the Arbitrator passed an award granting an amount of Rs.16,53,720/- to the Original Petitioner. 8. The land of the Original Petitioner in W.P.(C) No. 27156 of 2012 admeasuring 0.1559 hectares in Sy. Nos. 258/1 and 491/2 & 6 of Block No.44 of Vadakkanchery Village was acquired by the Deputy Collector on requisition of the NHAI under the provisions of the Act 48 of 1956 and the Arbitrator passed an award granting an amount of Rs.13,88,715/- to the Original Petitioner. 9. The Original Petitioners filed the writ petitions challenging the categorisation of the lands and inadequacy of the compensation. The learned Single Judge in the impugned judgment entered into the merits of the amounts granted under the awards and found that the amounts awarded by the Arbitrator are not adequate. 9. The Original Petitioners filed the writ petitions challenging the categorisation of the lands and inadequacy of the compensation. The learned Single Judge in the impugned judgment entered into the merits of the amounts granted under the awards and found that the amounts awarded by the Arbitrator are not adequate. The learned Single Judge referred to the fact that statutory remedy is provided to challenge the awards under Section 34 of the Arbitration and Conciliation Act, 1996 (Act 26 of 1996) and the scope is very limited, and therefore, proceeded to hold that even if statutory remedies are available, Court can interfere with the order passed by the inferior court or the authority under the writ jurisdiction. Accordingly, the learned Single Judge allowed the writ petitions, set aside the awards of the Arbitrator and remitted the matters to Respondent No.2 for fresh consideration. The Petitioners were given liberty to adduce evidence to substantiate their claim. The Arbitrator was directed to pass an award afresh within a period of six months. 10. The appeals have been admitted and have come up for hearing. 11. We have heard Sri. Salil Narayanan, learned counsel for the Appellant NHAI, Sri. K. Abdul Jawad, learned counsel for Respondent No.1/Writ Petitioners, and Sri. K.P. Harish, learned Senior Government Pleader. 12. The main ground raised by the learned counsel for the Appellant is that the learned Single Judge ought not have entertained the writ petitions when a remedy to challenge the awards of the Arbitrator under Section 34 of Act 26 of 1996 is provided. Furthermore, the limitation provided under Section 34 of the Act 26 of 1996 was over and once the statutory remedy was closed, a writ petition could not have been filed. The learned counsel submitted that, therefore, the judgment delivered by the learned Single Judge ought to be set aside. 13. The learned counsel for Respondent No.1 supported the impugned judgment and submitted that even though there is an alternate remedy available, the jurisdiction of the High Court is not barred to entertain a challenge to an arbitral award. He submitted that the remedy under Section 34 of the Act 26 of 1996 is limited. 14. As per Section 3-G(6) of the Act 48 of 1956, the Arbitration and Conciliation Act applies to every arbitration under the Act 48 of 1956. He submitted that the remedy under Section 34 of the Act 26 of 1996 is limited. 14. As per Section 3-G(6) of the Act 48 of 1956, the Arbitration and Conciliation Act applies to every arbitration under the Act 48 of 1956. Thus, the challenge to the award of the Arbitrator under Section 3-G(5) of the Act 48 of 1956 is provided under Section 34 of the Act 26 of 1996. Section 34(1) provides that recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3) of the said section. Under Section 34(3), an application for setting aside an award may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral Tribunal. The proviso to said sub-section stipulates that, if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. 15. Therefore, the challenge to the arbitral award has to be made within three months and if the Court is satisfied, then within a further period of thirty days, it may entertain the application, but not thereafter. In the present appeals, no application under Section 34 of the Act 26 of 1996 was made. The awards were issued by the Arbitrator on 25 May 2011 in W.P.(C) No. 27156 of 2012 and on 4 June 2011 in W.P.(C). Nos. 29437 & 31306 of 2011. Thereafter, the writ petitions have been filed by the Original Petitioners during November 2011. 16. Two main topics arise for consideration. First, the law on challenge to an arbitral award under Articles 226 and 227 of the Constitution of India generally. Second, the law on the challenge to an arbitral award under Articles 226 and 227 of the Constitution of India after the limitation period under the Act is over. 17. 16. Two main topics arise for consideration. First, the law on challenge to an arbitral award under Articles 226 and 227 of the Constitution of India generally. Second, the law on the challenge to an arbitral award under Articles 226 and 227 of the Constitution of India after the limitation period under the Act is over. 17. The first question that arises for consideration is whether the award of the Arbitrator under the Act 48 of 1956 could be set aside in a writ petition or a petition under Section 34 of the Act 26 of 1996 has to be filed. The Hon’ble Supreme Court in SBP & Co. v. Patel Engineering Ltd. & Anr. [ (2005) 8 SCC 618 disapproved the stand adopted by some of the High Courts that any order passed by the arbitral Tribunal is capable of being corrected by the High Court under Article 226 or 227 of the Constitution of India and such an intervention by the High Courts is not permissible. The Hon’ble Supreme Court held that the object of minimizing judicial intervention while the matter is in the process of being arbitrated upon, will certainly be defeated if the High Court could be approached under Article 227 of the Constitution of India or under Article 226 of the Constitution of India against every order made by the arbitral Tribunal. The Division Bench of this Court in the case of Jameela v. National Highway Authority of India-NHAI [ 2024 (3) KLT 517 ] following the decision in the case of Sterling Industries v. Jayprakash Associates Ltd. and Others ( AIR 2019 SC 3558 ) observed that the award of the Arbitrator cannot be challenged under Article 226 of the Constitution of India on the ground of insufficiency of the compensation amount awarded and the remedy lies in filing an application under Section 34 of the Act 26 of 1996. 18. The second issue is if the period of limitation under a statute is over whether a writ petition can be entertained. The Act 26 of 1996 provides a simplified procedure for dispute resolution, where the Arbitrator is appointed by consensus or by the Court if no consensus is reached. The Act limits the grounds for challenging an award under Section 34(2). The legislative intent is to ensure speedy disposal of arbitral proceedings, as evident from the entire scheme of the Act. The Act 26 of 1996 provides a simplified procedure for dispute resolution, where the Arbitrator is appointed by consensus or by the Court if no consensus is reached. The Act limits the grounds for challenging an award under Section 34(2). The legislative intent is to ensure speedy disposal of arbitral proceedings, as evident from the entire scheme of the Act. Section 34(3) stipulates a time limit, stating that an application for setting aside may not be made after three months from the date of receiving the arbitral award or from the date on which a request under Section 33 has been disposed of by the arbitral tribunal. However, the Court may entertain the application within thirty days if it is satisfied that the applicant was prevented by sufficient cause from making the application within the three-month period, but not thereafter. In the case of Union of India v. Popular Construction Co., [ (2001) 8 SCC 470 ], the Hon’ble Supreme Court considered whether the Court could extend the period under Section 34(3) of the Act by recourse to Section 5 of the Limitation Act, 1963. The Hon’ble Supreme Court observed that the words 'but not thereafter' used in the proviso to Section 34(3) are crucial, as they bar the application of Section 5 of the Limitation Act. The Hon’ble Supreme Court laid down the law that the Court cannot entertain an application to set aside the Award beyond the extended period under the proviso. 19. The issue whether the High Court has the authority to grant relief under its writ jurisdiction, despite the time limit placed on challenging arbitral awards under the Act 26 of 1996 was considered by the Hon’ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada & Ors. v. M/s. Glaxo Smith Kline Consumer Health Care Ltd. [ (2020) 19 SCC 681 ). The Hon’ble Supreme Court laid down that the High Court cannot overlook the statutory period and should not issue a writ that contradicts legislative intent. Therefore, a writ petition challenging an arbitral award after the stipulated time limit under Section 34 of the Act has elapsed cannot be entertained under Articles 226 and 227 of the Constitution of India. 20. The Petitioners cannot claim to be without a remedy. There is a difference between the absence of legal remedies and failing to pursue a remedy within the specified time limit. 20. The Petitioners cannot claim to be without a remedy. There is a difference between the absence of legal remedies and failing to pursue a remedy within the specified time limit. The Petitioners fall into the latter category. The Petitioners are without a remedy due to their own actions. 21. In light thereof, we find that the interference by the learned Single Judge with the arbitral awards in writ jurisdiction was not a permissible exercise. The appeals, therefore, will have to be allowed and are accordingly allowed. The judgment delivered by the learned Single Judge in W.P.(C) Nos. 29437, 31306 of 2011 and W.P.(C) No. 27156 of 2012 is quashed and set aside.