[NHA Act] Section 3G(5) Petition Not Decided Within Prescribed Period Doesn't Preclude Landowner To Seek Enhanced Compensation: Himachal Pradesh High Court

The Himachal Pradesh High Court single bench of Justice Jyotsna Rewal Dua held that landowner cannot be left high and dry for no fault of his. It held that the mere fact that his petition under Section 3G(5) of the National Highways Act was not decided by the Statutory Authority within the prescribed/extended period should not foreclose his right to seek enhancement in compensation.

The bench held that Section 29A(4) of the Arbitration and Conciliation Act, 1996 empowers the Court to extend the mandate of the Arbitrator in deserving cases.

Brief Facts:

The matter pertained to land parcels that were acquired by the Central Government for the purpose of expanding and maintaining NH-21. The Competent Authority for Land Acquisition awarded compensation. Unsatisfied with the amount, the landowner sought enhancement through a petition under Section 3G(5) of the National Highways Act, 1956. The Arbitrator ruled in favor of the landowner and increased the compensation.

NHAI, invoking Section 34 of the Arbitration and Conciliation Act (“Arbitration Act”), challenged this award in the District Court of Mandi. The District Judge overturned the Arbitrator's award and held that the Arbitrator continued with the proceedings after the expiration of the mandated one-year period without obtaining the necessary consent or an extension from the court as required under Section 29A of the Arbitration Act.

Dissatisfied with the District Judge's decision and the resultant nullification of the Arbitrator's award, the landowner filed an appeal under Section 37 of the Arbitration Act in the Himachal; Pradesh High Court (“High Court”).

Observations by the High Court:

The High Court noted that according to Section 29A(1) of the Arbitration Act, an arbitral award must be made within 12 months from the date the Arbitral Tribunal enters upon the reference. Section 29A(3) allows for an extension of this period for a further six months with the consent of the parties. The High Court referred to its decision in Balak Ram and Others versus NHAI) and connected matters and held that consent for extending the arbitral period need not be explicit or in writing; it can be deemed or implied from the parties' conduct. If the parties proceed with the arbitration beyond twelve months without raising objections, such conduct amounts to consent.

The High Court noted that the petition under Section 3G of the National Highways Act was filed before the Arbitrator on 02.01.2016, and the award was made on 22.12.2017, a period exceeding the allowable 12+6 months by an additional five months. It held that even if the parties' consent to continue beyond the initial twelve months is assumed, such consent could only account for an additional six months. Thus, it held that the Arbitrator's award, issued five months beyond  18-month period, was not covered under Section 29A(3) of the Arbitration Act.

Given this delay, the High Court considered the landowner's recourse under Section 29A(4) of the Arbitration Act, which allows the court to extend the time for the Arbitrator to pass an award beyond the specified or extended period. The High Court emphasized that the landowner should not suffer due to the Arbitrator's delay, especially when seeking enhanced compensation for acquired land. Section 29A(4) empowers the court to extend the Arbitrator's mandate in deserving cases, either before or after the expiry of the arbitration period.

Therefore, the High Court partly allowed the appeal and remanded the matter to the Arbitrator for fresh adjudication.

Case Title: Hari Singh vs National Highways Authority of India

Citation: 2024 LiveLaw (HP) 27

Advocate for the Appellant: Yudhbir Singh Thakur

Advocate for the Respondent: Shreya Chauhan

Click Here To Read/Download Order or Judgment