[NHAI Act] Landowner Shouldn't Suffer For Act Or Omission Of Arbitrator, Right To Property Is Constitutional Right Under Article 300A: Himachal Pradesh High Court

Herein, as the land of the landowner was acquired under the provisions of the National Highways Authority of India Act, 1956, it held that the landowner has a right to be adequately compensated for the land which has been acquired as per law.

Brief Facts:

Central Government issued a Notification for land acquisition in District Mandi, H.P., for the purpose of four-laning National Highway-21. The Notification under Section 3(A) (1) of the NHAI Act, 1956 was published and under Section 3(G)(3) in 'The Tribune' and 'Dainik Jagran' on 22.05.2012. The Competent Authority assessed the market value of the acquired land at Rs.35/- lac per bigha. The landowner, feeling aggrieved, made a Reference for enhancement of compensation, arguing that the market value was over Rs.1.00/- Crore per bigha. The Arbitrator, in an award, ordered compensation at Rs.36.00/- lac per bigha along with 30% solatium and 9% interest.

The National Highways Authority of India (NHAI) appealed the Arbitration Petition under Section 34 of the Arbitration and Conciliation Act (“Arbitration Act”). The District Judge, in the judgment, addressed the issue of the time limit for the award as per Section 29(A) of the Arbitration Act. The section mandates that the award should be made within 12 months from the date the arbitral tribunal enters upon the Reference, extendable by mutual consent for up to six months. The District Judge found the award announced after the expiry of one year without the express consent of the parties to extend the period unsustainable in the eyes of the law.

Feeling aggrieved, the Appellant approached the Himachal Pradesh High Court (“High Court”).

Observations by the High Court:

The High Court referred to its decision in Rattan Chand and another versus the National Highways Authority of India and another which was subsequently upheld by the Supreme Court in SLP (C) No.21144 of 2023. The High Court held that the award was not issued by the Arbitrator within twelve months from the completion of pleadings, as mandated by Section 29(A) of the Act. Under Section 23(4), the statement of claim and defense should be completed within six months from the date of the arbitrator's appointment.

However, the High Court held that the Appellant should not suffer due to the arbitrator's omission. It emphasized the constitutional right to property under Article 300A of the Indian Constitution, stating that the Appellant must be adequately compensated for the acquired land under the National Highways Authority of India Act, 1956. Although Section 29(A) of the Arbitration Act outlines the termination of the arbitrator's mandate after twelve months, the High Court pointed out that Sub-section (4) grants the court the power to extend the period for announcing the award, either before or after the specified timeframe.

The High Court reiterated that as the Arbitrator is a statutory authority, it is primarily their responsibility to decide and announce the award within the statutory period. If the arbitrator fails to do so, and the parties do not seek an extension from the court, the aggrieved party, particularly the landowner, should not suffer. Notably, it noted that there is no specified time limit under Section 29(A) of the Arbitration Act for parties to approach the court for an extension after the expiry of the statutory period for announcing the award.

Therefore, while not disturbing the findings of the District Judge, the High Court remanded the matter back to the Arbitrator for fresh adjudication. The High Court extended the time for pronouncing a fresh award until 21.11.2024.

Case Title: Hari Ram and others. Vs National Highways Authority of India.

Citation: 2024 LiveLaw (HP) 22

Case Number: OMP(M) No. 63 of 2023

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