Ghanshyam Mahajan v. Land Acquisition Officer Cum Competent Authority
2025-03-07
RANJAN SHARMA
body2025
DigiLaw.ai
JUDGMENT : Ranjan Sharma, J. 1. Petitioner [Ghanshyam Mahajan], has come up, before this Court, seeking the following relief(s):- “It is, therefore, respectfully prayed that in view of the fact stated above the application may kindly be allowed and the time limit for completing the Arbitration proceedings in Arbitration Reference Case No. 900/16 titled as Ghanshyam Mahajan vs. Land Acquisition Officer and others pending before the Ld. Divisional Commissioner (Arbitrator), Mandi, Distt. Mandi, H.P. may kindly be extended for a further period of six months or any other order or directions which this Ld. Court may deem fit be passed in the interest of justice.” FACTUAL MATRIX: 2. Case of petitioner [Ghanshyam Mahajan] as set-up by Mr. Varun Rana, 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 126.500 to Kilometer 188.917 (Bilaspur-Nerchowk Section) of National Highway No. 21 for building, widening, maintenance, management and operation of said Highway in State of Himachal Pradesh. Consequently, the land belonging to petitioner at Muhal Thalla/35, Tehsil Sundernagar, Mandi [H.P.] was acquired by CALA i.e. Competent Authority/Land Acquisition in terms of an Award No. 43/2013-14, dated 30.10.2013: (i) Feeling aggrieved against the Award dated 30.10.2013, 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, Mandi, Himachal Pradesh which was registered as Reference Petition No. 900 of 2016 , whereby, Learned Arbitrator initiated the reference proceedings in June 2016 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.
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. (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 stood terminated and consequently, the arbitral proceedings were kept in abeyance, so as to 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 4 of instant petition , which reads as under:- “4. The perusal of the record/order sheet would demonstrate that the present reference petition was taken up for hearing jointly with other Case No. 1024/17 titled as Devender Singh vs. L.A.A. Bilaspur and a common Order sheet was maintained. That the parties were summoned on 04-01-2018 for the service and the case was adjourned to 29-01-2018 and 08-02-2018 on which date the service was affected and the case was adjourned to 06-04-2018 for the reply of the Respondents. The parties put appearance on 07-08-2018 but the Respondents failed to file the reply and the case was adjourned to 23-10-2018, 22-01-2019, 05- 04-2019, 13-06-2019, 06-08-2019, 11-10-2019, 06-12-2019 for the same purpose. Thereafter the case was taken up for effective hearing on 07-12-2021 for the same purpose but the Respondents failed to reply, and the right to reply was closed by the Order of the Ld. Arbitrator and the case was adjourned to 27-12-2021 for the evidence of the petitioners. Thereafter the case was taken for effective hearing on 31- 12-2021 and adjourned for the same purpose to 05-04-2022, 31-05-2022, 16-06-2022 and 16-08-2022 on which date at the Application of the Ld. Counsel for the Petitioner the case was consolidated with Case No. 1024/17 titled as Devender Singh vs. L.A.A. Bilaspur, which was fixed for the evidence of the Respondents and the case was adjourned on 01-10- 2022 on which date the Ld.
Counsel for the Petitioner the case was consolidated with Case No. 1024/17 titled as Devender Singh vs. L.A.A. Bilaspur, which was fixed for the evidence of the Respondents and the case was adjourned on 01-10- 2022 on which date the Ld. Counsel for the Respondents stated that he does not intend to lead any evidence on behalf of the Respondent in this case and the case was adjourned to 1-10-2022 for the purpose of arguments on which date it was realized that the mandate of the arbitrator stands terminated by lapse of time as per provisions of the section 29A(1) of the Arbitration and Conciliation Act 1996. During the intervening period between the above dates the arbitrator did not hold sittings on date of hearing dated 04-01-2018, 29-01-2018, 06-04-2018, 22-01-2019, 13-06-2019, 20-05-2020, 14-10- 2020, 23-02-2021, 16-04-2021, 30-04- 2022, 21-05-2022. Vide order dated 01-10- 2022 the Ld. Arbitrator has held that his mandate to pass the award as provided under section 29(a) has expired as such the matter is kept in abeyance Certified copies of order sheets of the Ld. Arbitrator are annexed as Annexure P-1.” (iii) Based on averments in Para 4 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 petitioner has 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. 3. 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.2-NHAI, Ms. Shreya Chauhan does not dispute the above position.
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. 4. Heard Mr. Varun Rana, Learned Counsel for the petitioner, Ms. Shreya Chauhan, Learned Counsel for contesting respondent No.2-NHAI as well as Mr. Sidharth Jalta, Learned Deputy Advocate General for Respondent No.1-State and have gone through the material on record. STATUTORY PROVISION(S): 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.
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 6. 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 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 petitioner of the fruits of such reference.
The 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 7. 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 4 of instant petition] and in keeping the arbitral proceedings in abeyance; deserves to be set-aside; and the claim of the petitioner for enlargement of time for concluding the arbitral proceedings needs to be accepted , for the following reasons:- (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.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 (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; 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 2013 and even in Reference Proceedings before Arbitrator since June, 2016 till the passing of Order by Arbitrator terminating its mandate [as referred to in Para 4 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 4 of the Petition] deserves to be set aside by directing Learned Arbitrator to complete the arbitral proceedings within a reasonable period. PETITIONER CAN NOT BE MADE TO SUFFER DUE TO ABRUPT TERMINATION OF MANDATE (iii) Once the parties to arbitral proceedings have consensually participated in arbitral proceedings since June, 2016 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. (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.
(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, 2023 (1) SCALE 793, the mandate of an Arbitrator is liable to be extended by the Court, under Section 29A(4) and29A(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. 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.
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) (v) While dealing with a similar situation, the Hon’ble Supreme Court, in Civil Appeal No. 10620 of 2024 [Arising out of Special Leave Petition (Civil) No. 23320 of 2023] titled as Rohan Builders (India) Private Limited vs. 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: 8. In instant case, the arbitral proceedings continued since June, 2016 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 June, 2016 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: 9. 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 vs. LAC & Others decided on 13.01.2023. (ii) Arb. Case No. 44 of 2023, titled as Nand Lal alias Nand Lal Vardhan vs. Land Acquisition Collector and others decided on 18.04.2023. (iii) Arb. Case No. 122 of 2022, titled as Dinesh Kumar vs. Land Acquisition Officer and another decided on 07.07.2023. (iv) Arb. Case No. 43 of 2019, titled as Devki Nand Thakur vs. State of H.P. through Secretary (PW) decided on 12.07.2019. (i) Recently, this Court while dealing with the same subject road has enlarged the time of arbitral proceedings in Khem Singh vs. National Highway Authority of India & Another , Arbitration Case No. 718 of 2024 decided on 24.10.2024 and therefore, this Court sees no reason, as to why similar benefit, be not extended to the petitioner herein. CONCLUSION & DIRECTIONS: 10. In view of the above discussion and for the reasons recorded, here-in-above, the petition is allowed , in the following terms:- (i) Order-Action [as quoted in Para 2(ii) of this judgment] passed by Learned Arbitrator-cum-Divisional Commissioner, Mandi, in terminating his mandate in Arbitration Reference Petition [Revenue Appeal No.900 of 2016], is hereby quashed and set-aside; (ii) Arbitration Reference Petition/Revenue Appeal as in (i) supra, shall stand restored to its original position; (iii) Learned Arbitrator-cum-Divisional Commissioner, Mandi, 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. 11.
11. In aforesaid terms, instant petition and pending application(s) if any, shall stand disposed of.