National Highway Authority of India v. Competent Authority of Land Acquisition-cum-SDO, Nalagarh
2025-01-09
RANJAN SHARMA
body2025
DigiLaw.ai
JUDGMENT : Ranjan Sharma, J. Petitioner, National Highway Authority of India, has come up before this Court seeking following prayers:- “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 Arbitration Reference petition No.421/2018 pending before the Ld. Arbitratior-cum- Divisional Commissioner, Shimla, Camp at Solan, may kindly be extended for a further period of six months or any other orders or directions which this Ld. Court may deem fit be passed in the interest of justice.” FACTUAL MATRIX: 2. Case set-up by Mr. S.C. Sharma, Learned Senior Counsel, for the petitioner is that pursuant to the Notification under Section 3A of the National Highways Act, 1956, the Central Government published a Notification to acquire the stretch of land from Kilometer 17/930 to Kilometer 35/312 of National Highway No.21-A [New National Highway No.105] for building, widening, maintenance, management and operation of the said Highway in the State of Himachal Pradesh. Thereafter, the land belonging to respective shares of respondents No.2 to 48, herein, at Mouja Kripalpur, Hadbast No.143, District Solan [HP] was acquired. The Competent Authority of Land Acquisition [CALA]/Respondent No.1 i.e. SDO Civil Nalagarh, passed an Award on 06.03.2017 in relation of Village Kripalpur, Hadbast No.143. 2(i). Feeling aggrieved against the Award dated 06.03.2017 passed by Respondent No.1-CALA, the petitioners filed reference petition(s) before Learned Arbitrator-cum-Divisional Commissioner, Shimla [Camp at Solan, under Section 3G of the National Highways Act], which was registered as Reference Petition No.421 of 2018 , whereby the Learned Arbitrator continued the arbitral proceedings, but on 23.05.2023 [Annexure P-1 ], referred to as the ‘Impugned Order’ , the arbitral proceedings were closed and the mandate of Arbitrator was treated to have been terminated on the ground that the arbitral proceedings could not be completed within the lime schedule as per Section 29A(1) and Section 29A(3) of the Arbitration and Conciliation Act. 2(ii). Consequent upon the termination of mandate of Arbitrator and closure of arbitral proceedings the parties were directed to seek extension of time for continuance of arbitral proceedings by invoking the jurisdiction of a competent Court.
2(ii). Consequent upon the termination of mandate of Arbitrator and closure of arbitral proceedings the parties were directed to seek extension of time for continuance of arbitral proceedings by invoking the jurisdiction of a competent Court. In the above background, the petitioner-NHAI, has approached this Court that due to the passing of order dated 23.05.2023 [Annexure P-1] the petitioner was left without any remedy before an Arbitrator coupled with the fact that delay in completion of arbitral proceedings was not attributable either to the petitioners or the claimants-respondents. Moreover, the delay in completion of arbitral proceedings was entirely due to administrative reasons which reveal sufficient cause, for which the parties to arbitration should not be made to suffer. Moreover, the termination of arbitral proceedings and termination of mandate of Arbitrator tends to cause prejudice to the parties and therefore, in these circumstances, it was prayed that at least six months time may be granted to the Learned Arbitrator to conclude the arbitral proceedings. STAND OF RESPONDENTS: 3. Pursuant to the issuance of notice on 10.01.2024 in these proceedings neither the respondent No.1-CALA-cum-SDO, Civil Nalagarh, nor the private respondents No.2 to 48 have filed reply to instant petition despite the fact that respondents were served. Notably, some of the respondents were proceeded ex parte. 3(i). Upon listing of case today on 09.01.2025, learned counsel(s) for the parties jointly represent that it would be in the interest of justice and the parties herein that the impugned order dated 23.05.2023 [Annexure P-1] is set-aside with the direction to the Learned Arbitrator-cum-Divisional Commissioner, Shimla to complete the arbitral proceedings, within a reasonable time. 4. Heard Mr. S.C. Sharma, Learned Senior Counsel assisted by Mr. Arvind Negi, Advocate, for the petitioner, Mr. Prashant Sen, Learned State Counsel, Mr. Ashok Kumar, learned counsel for respondent No.47 as well as Mr. Arsh Chauhan, learned counsel for respondent No.48 and have gone through the case records. ANALYSIS: 5. 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.
Arsh Chauhan, learned counsel for respondent No.48 and have gone through the case records. ANALYSIS: 5. 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. (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.
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.” 6. In the background of statutory provisions and the material on record and the submissions made by respective counsels indicates that arbitral proceedings could not be completed within the prescribed period of 12 months under Section 29A(1) and within the extended period of 06 months with consent of parties, as per Section 29A (3) due to administrative reasons/engagements of the Learned Arbitrator. Material on record indicates that in addition to this, though the Reference Petition was filed on 14.10.2018, but on account of COVID Pandemic during the year 2020-2022 no such proceedings were effectively convened by the learned Arbitrator.
Material on record indicates that in addition to this, though the Reference Petition was filed on 14.10.2018, but on account of COVID Pandemic during the year 2020-2022 no such proceedings were effectively convened by the learned Arbitrator. Material on record further indicates that the delay in completion of arbitral proceedings was not attributable either to the petitioner or the respondents herein and the parties to arbitral proceedings cannot be made to suffer by closing the arbitral reference resulting in depriving either of the parties of the fruits of such reference. In these circumstances, the arbitral proceedings, admittedly, were not completed due to administrative and bona fide circumstances by the Arbitrator concerned. 7. Taking into account the entirety of the facts and circumstances, this Court is of the considered view that the Impugned Order dated 23.05.2023 [Annexure P-1] terminating the mandate of the Arbitrator and in closing the arbitral proceedings deserves to be set-aside and the claim of the petitioners for enlargement of time for concluding the arbitral proceedings needs to be accepted for the following reasons:- 7(i). Object of 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 the 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 18 months period yet, forcing certain eventualities leading to non-completion of arbitral proceedings within 18 months, the law-makers being conscious enough had prescribed 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. Factual matrix and the material on record in the instant case, indisputably indicate that once the arbitral proceedings could not be completed within 18 months by the Arbitrator concerned on account of COVID Pandemic during the years 2020- 2022 and thereafter due to administrative reasons which were not at all attributable to the parties herein then, in these circumstances, the non-completion of arbitral proceedings is borne out from the bona fide and unintentional act of the parties which appear to be bonafide and unintentional.
Further once the delay or non- completion of arbitral proceedings was attributable to the Arbitrator then, the parties herein, including the petitioner-NHAI in the instant case have sufficient grounds and sufficient cause for seeking extension of time for concluding the arbitral proceedings in the instant case and therefore, the impugned order dated 23.05.2023 [Annexure P-1] deserves to be set-aside by directing Learned Arbitrator to complete the arbitral proceedings within a reasonable period. 7(ii). Once the proceedings were instituted in the year 2018 and the proceedings continued before Learned Arbitrator without any objection with respect to the expiry of the time for completion of arbitral proceedings or objection that the mandate of Arbitrator had seized for want of completion of proceedings but to the contrary, the parties herein have consensually participated in arbitral proceedings then the abrupt termination of mandate and closure of arbitral proceedings by passing the Impugned Order on 23.05.2023 [Annexure P-1] has certainly prejudiced the parties to the arbitral proceedings which cannot be permitted to operate, resulting in prejudice to the parties herein. 7(iii). Once the statute enables the Court to enlarge the 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 then, in the instant case, since non-completion of arbitral proceedings was based on sufficient grounds-cause, which appear to be bona fide and unintentional and the parties have also participated in arbitral proceedings without any objection then, 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 such mandate is liable to be extended by the Court under Section 29A(4) and 29A(5) of the Act, which has been spelt out 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 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. 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.
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) 7(iv). Recently, 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 , has reiterated that the mandate of Arbitrator is liable to be extended in view of sufficient cause to the satisfaction of the Court in 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.
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. 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.
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.” 8. Based on the facts of the instant case, once the administrative reasons including the Pandemic had resulted non-completion of the arbitral proceedings within the maximum period of 18 months then, the parties to arbitral proceedings cannot be made to suffer for the fault or inaction in not completing the arbitral proceedings by the Arbitrator. In this backdrop, once the administrative reasons and COVID Pandemic and other bona fide circumstances has resulted in terminating the mandate of arbitral and closing the arbitral proceedings then, the parties to arbitral proceedings cannot be prejudiced without any fault attributable to them. Moreover, the act of a Court cannot prejudice a man and therefore, the termination of mandate of Arbitrator and closure of proceedings of Arbitrator, certainly amounts to prejudicing the petitioner by the act of an Arbitrator which is unsustainable in view of the principle of “ Actus Curiae Neminem Gravabit ” 9. Even a perusal of the Impugned Orders dated 23.05.2023 [Annexure P-1] reveals that the Arbitrator has directed the parties to seek extension or continuance of arbitral proceedings by intervention of the Court. This Impugned Order also supports the case of the parties herein for extension by invoking the jurisdiction of this Court. This admitted position, in itself is a sufficient cause, so as to direct the Arbitrator to complete the arbitral proceedings within a reasonable time as mandated by this Order, so as to give meaningful life to the enactment in Section 29A(1)(3)(4) & (5) of the statute and to make the statute workable and practicable in view of the peculiar facts in the instant case. Moreover, denial of extension, in facts of this case, shall lead to adversarial consequences to the parties herein and by prejudicing the rights of parties, without any fault attributable to them but due to the bona fide or inadvertent omission and inactions of the arbitrator concerned. In these circumstances, the prayer for extension by way of instant application has merit and the same is granted. 10.
In these circumstances, the prayer for extension by way of instant application has merit and the same is granted. 10. Similar issue came up for discussion and the Co-ordinate Bench(es) of this Court, have granted extension with directions to conclude the arbitral proceedings, within a specified time-line, in the following identical 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 Verus 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. (v) Arb. Case No.491 of 2023, titled as Rup Lal Verma versus The Land Acquisition Officer-cum-Competent Authority & anr. a/w connected matter, decided on19.08.2023. 11. Recently, the Co-ordinate Bench of this Court has granted extension of time to complete the arbitral proceedings by 06 months in Arbitration Case No.1012 of 2023 , titled as NHAI versus Competent Authority of Land Acquisition-cum- SDO Nalagarh & Ors. , decided on 09.01.2024. “3. The arbitral dispute has arisen out of the land acquisition in District Solan, H.P. for the purpose of construction of the National Highway, land for which has been acquired under the provisions of National Highways Act, 1956. The lands of the claimants have been acquired by the petitioner in the present case in District Solan. On 22.03.2017, the respondent No.1 i.e. competent authority passed an Award No.3 qua village Dadi Bhola, Hadbast No.146, District Solan, HP. 4. Feeling aggrieved by the aforesaid Award, the petitioner has preferred the Reference Petition No.423/2018, before the learned Arbitrator-cum-Divisional Commissioner, Shimla Camp at Solan, District Solan, and non-adjudication of the arbitral proceedings within the statutory period has resulted in filing of the instant petition. 5. The Reference Petition against the Award was filed by the petitioner long back. According to the petitioner, the matter alongwith other cases was posted on various dates and on most of the dates, the proceedings could not be taken further due to administrative reasons/engagements. It has further been submitted that the petition was filed on 14.10.2018 and due to Covid-19 pandemic during 2020-22, no effective hearing could take place.
According to the petitioner, the matter alongwith other cases was posted on various dates and on most of the dates, the proceedings could not be taken further due to administrative reasons/engagements. It has further been submitted that the petition was filed on 14.10.2018 and due to Covid-19 pandemic during 2020-22, no effective hearing could take place. Ultimately the case was ordered to be listed on 23.05.2023, when learned Arbitrator has ordered the proceedings to be closed, on account of the fact that proceedings could not be completed within period prescribed under Arbitration Act. 7. However, at this stage, the Court is restraining from making any further observation in the case save and except that henceforth, if the Court finds the Arbitrator derelicting his duties, then it shall not hesitate to invoke its powers as enshrined in Section 29 (A) (6) of the 1996 Act, to terminate the mandate of the Arbitrator, dehors the fact that the Arbitrator happens to be appointed in terms of the notification issued by the Central Government under Section 3G (a) of the National Highways Act, 1956. 8. In view of the above discussion, the instant petition is allowed and the Arbitrator-cum- Divisional Commissioner, Shimla Camp at Solan, District Solan, H.P., exercising the powers of Arbitrator under Section 3 of the National Highways Act, 1956 is directed to conclude the arbitral proceedings and to pass the arbitral award in Arbitration Case No.423/2018, on or before 8th July, 2024. Petition stands disposed of, so also the pending miscellaneous applications, if any.” 12. Recently, another Co-ordinate Bench in Arbitration Case No.878 of 2024 , titled as Deepak Kumar versus UOI & Ors. decided on 10.12.2024, has enlarged the time for completion of arbitral proceedings by 06 months in the following terms:- “3. I have heard learned counsel on both sides and considered the case file. It has been informed that in similar matters, taking recourse to Section 29A(4) of the Act, the Courts have extended the period for passing the award by six months. 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 27.12.2024.
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 27.12.2024. 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: 13. In view of the above discussion and for the reasons recorded here-in-above, the instant petition is allowed in the following terms:- (i). The Impugned Order dated 23.05.2023 [Annexure P-1] passed by Learned Arbitrator- cum-Divisional Commissioner, Shimla, in Arbitration Reference Petition No.421 of 2018 is quashed and set-aside. (ii). Arbitration Reference Petition No.421 of 2018, shall stand restored. (iii). Learned Arbitrator-cum-Divisional Commissioner, Shimla [Camp at Solan, under Section 3G of the National Highways Act], is mandated to complete the arbitral proceedings and to pass the Award in accordance with law on or before 31 st August, 2025 Pending miscellaneous application(s), if any, shall also stand disposed of accordingly.