Shiv Kumar v. National Highways Authority of India (NHAI)
2025-01-08
RANJAN SHARMA
body2025
DigiLaw.ai
JUDGMENT : Ranjan Sharma, J. Since common question of facts and law are involved, therefore, with the consent of parties, all these cases, are taken up for adjudication together at this stage, in the interests of justice. 2. Learned Counsel for petitioners states that Arbitration Case No.927 of 2024, titled as Shiv Kumar versus National Highways Authority of India (NHAI) & Another, may be treated as ‘Lead Case’ for adjudicating the said case and all connected petitions. Prayer not opposed by Learned Counsel for contesting respondents. Accordingly, the prayer is allowed and this Court proceeds in the above matters. 3. Petitioner [Shiv Kumar] in Lead Case i.e. Arbitration Case No.927 of 2024, has come up, before this Court, seeking the following relief(s):- “ It is, therefore, respectfully prayed that in view of the facts stated above the application may kindly be allowed and the time limit for completing the Arbitration proceedings in Case No.(Revenue Appeal) No.176 of 2022, titled as Shiv Kumar versus NHAI and another pending adjudication before the learned Arbitrator-cum-Divisional Commissioner Kangra at Dharamshala, District Kangra [HP], may kindly be extended for a further period of 6 months and delay if any may kindly be condoned.” FACTUAL MATRIX IN LEAD CASE- ARBITRATION CASE NO.927 OF 2024. 4. Case of petitioner [Shiv Kumar] in Arbitration Case No.927 of 2024, as set-up by Mr. Arush Matlotia, Learned Counsel is that pursuant to Notification under Section 3A of the National Highways Act, 1956, the Central Government published a Notification to acquire the stretch of land from Kilometer 11.0 to Kilometer 42.0 (Pathankot-Mandi Section) of National Highway No.154 for building, widening, maintenance, management and operation of said Highway in State of Himachal Pradesh. Consequently, the land belonging to petitioner at Village Kohri, Tehsil Nurpur, District Kangra [HP] was acquired by CALA i.e. Competent Authority/Land Acquisition in terms of an Award No.11 of 2021, dated 25.02.2021. 4(i). Feeling aggrieved against the Award dated 25.02.2021, passed by Competent Authority for Land Acquisition, the petitioner filed a reference petition under Section 3G(5) of national Highways Act before Learned Arbitrator-cum-Divisional Commissioner, Kangra, Himachal Pradesh which was registered as Revenue Appeal No.176 of 2022 , whereby, Learned Arbitrator initiated the reference proceedings in April 2022 by directing the NHAI to file reply, which was filed belatedly.
Thereafter issues were framed and after recording evidence of PW’s, the matter was taken up by Learned Arbitrator by directing the Respondent-NHAI to lead evidence. Thus, the arbitral proceedings were not concluded within the maximum permissible period of eighteen months as mandated under Section 29A(1) and Section 29A(3) of the Arbitration and Conciliation Act. 4(ii). It is averred that though the parties participated in arbitral proceedings from time to time, yet, abruptly the Arbitrator has passed an order that since the Award has not been passed within the period of maximum permissible period of eighteen months, therefore, the mandate of Arbitrator stands terminated and the arbitral proceedings were kept in abeyance so as enable the parties to seek extension of mandate or continuance of these proceedings from a competent Court. In this background, the petitioner has set up a case in Para 7 of instant petition, which reads as under:- “7. That as per Section 29(1) of the Arbitration and Conciliation Act, 1996, the award has to be passed within 12 months from the date of completion of pleadings but the said period of 12 months but thereafter the parties continued to participate in the proceedings for a further period beyond 6 months as provided under Section 29A(3) but the award has not been passed till date and as such the mandate of the Arbitrator stands terminated under the law.” 4(iii). Based on averments in Para 7 of the instant petition and consequent upon the passing of Order terminating the mandate of Arbitrator and in keeping arbitral proceedings in abeyance since the petitioner was left without any remedy coupled with the fact that the delay in completion of arbitral proceedings was not attributable to the petitioner; and delay in conclusion of arbitral proceedings was entirely due to administrative reasons, for which, the parties should not be made to suffer; coupled with the fact that the termination of mandate of Arbitrator will cause prejudice to the parties; therefore, the petitioners have come up seeking enlargement- extension of time for completion of arbitral proceedings with directions to Learned Arbitrator-cum-Divisional Commissioner concerned to conclude the proceedings expeditiously. 5.
5. Upon listing of this case today, Learned Counsel for the petitioner states that in identical matters relating to same subject road, the Arbitrator had passed similar order(s) terminating his mandate and had kept the arbitral proceedings in abeyance, whereafter the petitions were filed under Section 29(A)(4) of the Arbitration & Conciliation Act, wherein, the mandate of Arbitrator was extended by this Court. On a query by this Court, Learned Counsel for Respondent No.1-NHAI, Ms. Shreya Chauhan does not dispute the above position. Even, Learned Additional Advocate General appearing for Respondent No.2-State, states that in case, extension of time to conclude the arbitral proceedings have been accorded by this Court in identical cases, then, appropriate orders may be passed in present cases also. 6. Heard Mr. Arush Matlotia, Learned Counsel for the petitioner, Ms. Shreya Chauhan, Learned Counsel for contesting respondent No.1-NHAI as well as Mr. Vishav Deep Sharma, Learned Additional Advocate General for Respondent No.2-State and have gone through the material on record. STATUTORY PROVISION(S): 7. In order to appreciate the claim of the parties herein, it is necessary to have a recap of the statutory provision of Section 29A of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as ‘Act’] which reads as under:- “ 29A. Time limit for arbitral award — (1) The award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub- section (4) of section 23 Provided that the award in the matter of international commercial arbitration may be made as expeditiously as possible and endeavor may be made to dispose of the matter within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23. (2) If the award is made within a period of six months from the date the arbitral tribunal enters upon the reference, the arbitral tribunal shall be entitled to receive such amount of additional fees as the parties may agree. (3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months.
(3) The parties may, by consent, extend the period specified in sub-section (1) for making award for a further period not exceeding six months. (4) If the award is not made within the period specified in sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the Court has, either prior to or after the expiry of the period so specified, extended the period: Provided that while extending the period under this sub-section, if the Court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five per cent. for each month of such delay. Provided further that where an application under sub-section (5) is pending, the mandate of the arbitrator shall continue till the disposal of the said application: Provided also that the arbitrator shall be given an opportunity of being heard before the fees is reduced. (5) The extension of period referred to in sub-section (4) may be on the application of any of the parties and may be granted only for sufficient cause and on such terms and conditions as may be imposed by the Court (6) While extending the period referred to in sub-section (4), it shall be open to the Court to substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidence and material. (7) In the event of arbitrator(s) being appointed under this section, the arbitral tribunal thus reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal. (8) It shall be open to the Court to impose actual or exemplary costs upon any of the parties under this section. (9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.” UNDISPUTED FACTS 8.
(9) An application filed under sub-section (5) shall be disposed of by the Court as expeditiously as possible and endeavour shall be made to dispose of the matter within a period of sixty days from the date of service of notice on the opposite party.” UNDISPUTED FACTS 8. Undisputed facts are that the arbitral proceedings could not be completed within maximum period of 18 months [under Section 29A(1) & (3)] by the Arbitrator. The non-conclusion of arbitral proceedings was alleged to be due to the fact that Arbitrator was the Divisional Commissioner, who had to look after other administrative work and related exigencies; and the fact that delay in non-completion of arbitral proceedings was attributable to Respondents-NHAI who did not perform their part of obligation despite opportunities; and when, the non-completion of completion of proceedings was not attributable to petitioner who participated in arbitral proceedings then, the petitioner cannot be made to suffer prejudice by abrupt closure of arbitral proceedings which have resulted in depriving the petitioners of the fruits of such reference. Above facts, reveal that arbitral proceedings could not be primarily completed due to administrative and bona fide reasons which were beyond the control of Arbitrator concerned and aforesaid circumstances indicate sufficient cause for restoration of Reference Proceedings, which were closed/kept in abeyance by concerned Arbitrator in the instant case. ANALYSIS 9. Taking into account the entirety of the facts and circumstances, this Court is of the considered view that the Order-Action of Arbitrator in terminating his mandate [as referred to in Para 7 of instant petition(s)] and in keeping the arbitral proceedings in abeyance; deserves to be set-aside; and the claim of the petitioner(s) for enlargement of time for concluding the arbitral proceedings needs to be accepted , for the following reasons:- 9(i). Object of the arbitral proceedings is consensual entrustment of parties to an Arbitrator who is bound to complete the arbitral proceedings within a period of 12 months under Section 29A(1) and within extendable period of 06 months under Section 29(A)(3) of the Act. Meaning thereby that arbitral proceeding are to be completed by an Arbitrator within a period of 18 months in totality.
Meaning thereby that arbitral proceeding are to be completed by an Arbitrator within a period of 18 months in totality. Though, the arbitral proceedings under Section 29A(1) and Section 29A(3) are to be completed within a period of 18 months yet in case due to unforeseen eventualities the arbitral proceedings are not completed within 18 months, then the law-makers were conscious enough by prescribing a remedy under Section 29A(5), for extending the period of arbitral proceedings, only for sufficient cause and on such terms and conditions, as may be imposed by the Court. SUFFICIENT CAUSE FOR EXTENSION 9(ii). Factual matrix and material on record in instant case, indisputably indicate that the arbitral proceedings could not be completed within maximum stipulated period of 18 months by the Arbitrator concerned due to administrative reasons as the arbitrator happened to be Divisional Commissioner of concerned Division, and also due to non-performance of their part of the obligation by Respondent-NHAI despite several opportunities; and the fact that parties to arbitral proceedings could not be made to suffer without any fault attributable to petitioner(s); and even the petitioner and respondent-NHAI have participated in the arbitral proceedings without any objection beyond the period of 18 months; and in order to prevent any prejudice to petitioner who had been litigating from the date of passing of Award in the year 2021 and even in Reference Proceedings before Arbitrator since April, 2022 till the passing of Order by Arbitrator terminating its mandate [as referred to in Para 7 of petition]. Thus, the circumstances detailed herein above, indicate sufficient cause, which appears to be bona fide and unintentional and therefore, the Order-Action of Learned Arbitrator in terminating its mandate [as referred to in Para 7 of the Petition] deserves to be set aside by directing Learned Arbitrator to complete the arbitral proceedings within a reasonable period. PETITIONER CANNOT BE MADE TO SUFFER DUE TO ABRUPT TERMINATION OF MANDATE 9(iii). Once the parties to arbitral proceedings have consensually participated in arbitral proceedings since April, 2022 then, the Order-Action terminating the mandate of Arbitrator and keeping the arbitral proceedings in abeyance has certainly prejudiced the parties to arbitral proceedings, which cannot be permitted to operate, resulting in prejudice to the parties herein. 9(iv).
Once the parties to arbitral proceedings have consensually participated in arbitral proceedings since April, 2022 then, the Order-Action terminating the mandate of Arbitrator and keeping the arbitral proceedings in abeyance has certainly prejudiced the parties to arbitral proceedings, which cannot be permitted to operate, resulting in prejudice to the parties herein. 9(iv). Once the statute enables the Court to enlarge time for completion of arbitral proceedings subject to its satisfaction based on sufficient cause and such others terms and conditions as the Court deems fit and proper. In the instant case, since non-completion of arbitral proceedings was due to non-filing of reply despite several opportunities and non leading of evidence by NHAI and also due to exigencies as the Divisional Commissioner being the Arbitrator had to attend to other administrative assignment, therefore, the above reasons spell out sufficient cause which is bonafide and appears to be unintentional therefore, even as per the mandate of the Hon’ble Supreme Court in TATA Sons Pvt. Ltd.(Formerly TATA Sons Ltd.) vs. Siva Industries and Holdings Ltd. and others, reported in 2023(1) SCALE 793, the mandate of an Arbitrator is liable to be extended by the Court, under Section 29A(4) and 29A(5) of the Act, in the following terms:- “24 The provisions of Section 29A, as originally introduced into the statute, mandated that all awards shall be made within a period of twelve months from the date on which the arbitral tribunal enters upon the reference. The explanation clarified when the arbitral tribunal would be deemed to have entered upon the reference, namely, the date on which the arbitrator has received written notice of the appointment. The mandatory nature of the provisions of Section 29A(1) and their application to all arbitrations conducted under the Act, domestic or international commercial, was evident from the use of the word “shall”. In terms of Section 29A(4), in case the arbitral award was not rendered within the twelve or eighteen month period as the case may be, the mandate of the arbitrator(s) would stand terminated, unless on an application made by any of the parties, the court extended time on sufficient cause being shown. xxxx. xxx… xxx.. 26. Sub-section (3) of Section 29A empowers parties, by consent, to extend the period specified in sub-section (1) for making the award by a further period not exceeding six months.
xxxx. xxx… xxx.. 26. Sub-section (3) of Section 29A empowers parties, by consent, to extend the period specified in sub-section (1) for making the award by a further period not exceeding six months. Thereafter, if the award is not made within the period which is specified in sub-section (1) or the extended period specified in sub-section (3), the mandate of the arbitrator shall terminate unless the court has extended the period either prior to or after the expiry of the period so specified. In other words, the timeline of twelve months for making the award (in matters other than international commercial arbitration), is qualified by the consensual entrustment to the parties under sub-section (3) to extend the period by six months after which the court is empowered in terms of sub-section (4) to extend the period for making the award. The submission of the second respondent is that the provisions of sub-section (3) and sub-section (4) must also apply to an international commercial arbitration. This would merit close scrutiny. The legislature has not expressly excluded the applicability of sub-sections (3) and (4) of Section 29A to an international commercial arbitration. But, at the same time, it must be noticed that the rationale underlying sub-section (3) is to ensure that despite the stipulation of twelve months for the making of an arbitral award in the domestic context, parties may by consent agree to an extension of time by a further period of six months. Such an extension of six months is envisaged in the case of a domestic arbitration since there is a mandate that the award shall be made within a period of twelve months. A further extension has, however, been entrusted to the court in terms of sub-section (4) of Section 29A However, insofar as an international commercial arbitration is concerned, the statutory regime is clear by the substantive part of sub-section 1 of Section 29A in terms of which the timeline of twelve months for making an arbitral award is not applicable to it. In an international commercial arbitration, the legislature has only indicated that the award should be made as expeditiously as possible and that an endeavour may be made to dispose of the matter within a period of twelve months from the completion of pleadings.” (Underlining Ours) 9(v).
In an international commercial arbitration, the legislature has only indicated that the award should be made as expeditiously as possible and that an endeavour may be made to dispose of the matter within a period of twelve months from the completion of pleadings.” (Underlining Ours) 9(v). While dealing with a similar situation, the Hon’ble Supreme Court, in Civil Appeal No.______ of 2024 [Arising out of Special Leave Petition (Civil) No.23320 of 2023] titled as Rohan Builders (India) Private Limited versus Berger Paints India Limited , decided on 12.09.2024, has reiterated that the mandate of an Arbitrator is liable to be extended in view of sufficient cause to the satisfaction of the Court, in the following terms:- “15. Rohan Builders (India) Pvt. Ltd. (supra) highlights that an interpretation allowing an extension application post the expiry period would encourage rogue litigants and render the timeline for making the award inconsequential. However, it is apposite to note that under Section 29A(5), the power of the court to extend the time is to be exercised only in cases where there is sufficient cause for such extension. Such extension is not granted mechanically on filing of the application The judicial discretion of the court in terms of the enactment acts as a deterrent against any party abusing the process of law or espousing a frivolous or vexatious application. Further, the court can impose terms and conditions while granting an extension. Delay, even on the part of the arbitral tribunal, is not countenanced.28 The first proviso to Section 29A(4) permits a fee reduction of up to five percent for each month of delay attributable to the arbitral tribunal. 16. Lastly, Section 29A(6) does not support the narrow interpretation of the expression “terminate”. It states that the court – while deciding an extension application under Section 29A(4) – may substitute one or all the arbitrators. Section 29A(7) states that if a new arbitrator(s) is appointed, the reconstituted arbitral tribunal shall be deemed to be in continuation of the previously appointed arbitral tribunal. This obliterates the need to file a fresh application under Section 11 of the A & C Act for the appointment of an arbitrator. In the event of substitution of arbitrator(s), the arbitral proceedings will commence from the stage already reached. Evidence or material already on record is deemed to be received by the newly constituted tribunal.
This obliterates the need to file a fresh application under Section 11 of the A & C Act for the appointment of an arbitrator. In the event of substitution of arbitrator(s), the arbitral proceedings will commence from the stage already reached. Evidence or material already on record is deemed to be received by the newly constituted tribunal. The aforesaid deeming provisions underscore the legislative intent to effectuate efficiency and expediency in the arbitral process. This intent is also demonstrated in Sections 29A(8) and 29A(9). The court in terms of Section 29A(8) has the power to impose actual or exemplary costs upon the parties. Lastly, Section 29A(9) stipulates that an application for extension under sub-section (5) must be disposed of expeditiously, with the endeavour of doing so within sixty days from the date of filing. 17. As per the second proviso to Section 29A(4), the mandate of the arbitral tribunal continues where an application under sub- section (5) is pending. However, an application for extension of period of the arbitral tribunal is to be decided by the court in terms of sub-section (5), and sub-sections (6) to (8) may be invoked. The power to extend time period for making of the award vests with the court, and not with the arbitral tribunal. Therefore, the arbitral tribunal may not pronounce the award till an application under Section 29A(5) of the A & C Act is sub-judice before the court. In a given case, where an award is pronounced during the pendency of an application for extension of period of the arbitral tribunal, the court must still decide the application under sub-section (5), and may even, where an award has been pronounced, invoke, when required and justified, sub-sections (6) to (8), or the first and third proviso to Section 29A(4) of the A & C Act. 18. While interpreting a statute, we must strive to give meaningful life to an enactment or rule and avoid cadaveric consequences that result in unworkable or impracticable scenarios. An interpretation which produces an unreasonable result is not to be imputed to a statute if there is some other equally possible construction which is acceptable, practical and pragmatic.” PETITIONER CANNOT SUFFER DUE TO PENDENCY OF PROCEEDINGS: 10. In instant case, the arbitral proceedings continued since April, 2022 in which the petitioner and respondents participated without any objection. These proceedings stretched over for almost two years.
In instant case, the arbitral proceedings continued since April, 2022 in which the petitioner and respondents participated without any objection. These proceedings stretched over for almost two years. Once the Learned Arbitrator permitted the parties to participate in the arbitral proceedings beyond permissible period of 18 months, then, the Arbitrator cannot keep the arbitral proceedings in abeyance by treating his mandate to have been terminated, certainly amounts to prejudicing the petitioner due to an act Arbitrator herein which defeats the principle of “ Actus Curiae Neminem Gravabit ” EXTENSION GIVEN IN OTHER CASES BY CO-ORDINATE BENCH AND THIS COURT IN SIMILAR FACT-SITUATION: 11. Similar issue came up for discussion and Co-ordinate Bench(es) of this Court, granted enlargement-extension of time to Learned Arbitrator to conclude the arbitral proceedings, in the following cases: (i) Arb. Case No.2 of 2023, titled as Prakash Chand Versus LAC & Others, decided on 13.01.2023. (ii) Arb. Case No.44 of 2023, titled as Nand Lal alias Nand Lal Vardhan Versus Land Acquisition Collector and others, decided on 18.04.2023. (iii) Arb. Case No.122 of 2022, titled as Dinesh Kumar Versus Land Acquisition Officer and another, decided on 07.07.2023. (iv) Arb. Case No.43 of 2019, titled as Devki Nand Thakur Versus State of H.P. through Secretary (PW), decided on 12.07.2019. 11(i). Recently, Co-ordinate Bench of this Court while dealing with the same stretch of land from kilometer 11.0 to kilometer 42.0 in revenue Village Kohri, Tehil Nurpur, District Kangra [HP] granted extension of time to complete the arbitral proceedings within six months, in Arbitration Case No.901 of 2024 , titled as Navneet Gupta versus National Highways Authority of India (NHAI) & anr. , decided on 23.12.2024, which reads as under:- “4. The petitioner has made out a case for extending the period for deciding the arbitration proceedings by six months. Ordered accordingly. The mandate of learned Arbitrator in deciding the petition under reference is extended by six months from today. The parties, through their learned counsel, are directed to appear before the learned Arbitrator on 02.01.2025. All rights and contentions of the parties are left open to be adjudicated by the learned Arbitrator. The petition stands disposed of in the above terms, so also the pending miscellaneous application(s), if any.” CONCLUSION & DIRECTIONS: 12. In view of the above discussion and for the reasons recorded, here-in-above, all the above petitions are allowed , in the following terms:- (i).
The petition stands disposed of in the above terms, so also the pending miscellaneous application(s), if any.” CONCLUSION & DIRECTIONS: 12. In view of the above discussion and for the reasons recorded, here-in-above, all the above petitions are allowed , in the following terms:- (i). Order-Action [as quoted in Para 4(ii) of this judgment] passed by Learned Arbitrator-cum-Divisional Commissioner, Kangra, in terminating his mandate in Arbitration Reference Petition(s) [Revenue Appeal(s) Nos.176, 182, 243, 177, 220, 191 of 2022], are quashed and set-aside; (ii). All the Arbitration Reference Petitions/Revenue Appeals as in (i) supra, shall stand restored to their original position; (iii). Learned Arbitrator-cum-Divisional Commissioner, Kangra, is mandated to complete the arbitral proceedings and to pass the Award in accordance with law within six months from date of receipt of copy of this judgment. (iv). Costs made easy for respective parties. In aforesaid terms, instant petition(s) and all pending application(s) if any, shall stand disposed of.