Onus On Authority Acting Arbitrator To Perform Task Within Time Schedule Prescribed In Statue: Himachal Pradesh High Court Directs Arbitrator To Complete Proceedings

Brief Facts:

The Petitioner approached the Himachal Pradesh High Court to extend the timeframe for the completion of arbitral proceedings. The case was pending before the Divisional Commissioner-cum-Arbitrator in Shimla, District Shimla, H.P., who exercises the powers of Arbitrator under Section 3 of the National Highways Act, 1956.

The arbitral dispute stemmed from land acquisition in District Solan, H.P., for the construction of a National Highway. This land acquisition fell under the provisions of the National Highways Act, 1956.

Following dissatisfaction with the Award, the landowners initiated Reference Petition No. 188/2017 before the Divisional Commissioner-cum-Arbitrator in Shimla. The delay in adjudicating the arbitral proceedings within the statutory period has led to the filing of the petition before the High Court.

The Reference Petition challenging the Award was filed by the landowners quite some time ago. According to the Petitioners, the Arbitrator in Shimla, H.P., repeatedly granted adjournments without adhering to the prescribed time period and mandate under Section 29A of the Arbitration and Conciliation Act, 1996. This continuous granting of adjournments resulted in unnecessary delays in announcing the award by the Divisional Commissioner in Shimla, District Shimla.

Observations by the High Court:

The High Court held that the proceedings overseen by the Arbitrator transgressed statutory provisions outlined in the Arbitration Act. It noted that when a statute assigns a specific authority, such as an Arbitrator, to perform a particular task within a prescribed time frame, the responsibility lies with that authority to execute the task as mandated by the statute. Any delay must be genuine and justifiable. However, in the petition, despite the completion of pleadings, the proceedings were further adjourned, ultimately leading to the closure of proceedings by the Arbitrator, due to the expiration of the time limit for passing an award in arbitral proceedings.

The High Court refrained from making additional observations in this case, except to stipulate that henceforth, should the Arbitrator neglect their duties, the High Court reserved the right to exercise its powers to terminate the mandate of the Arbitrator, regardless of their appointment in accordance with the notification issued by the Central Government under Section 3G (a) of the National Highways Act, 1956.

Consequently, the present petition was granted, and the Divisional Commissioner-cum-Arbitrator in Shimla, District Shimla, H.P., acting under the powers conferred by Section 3 of the National Highways Act, 1956, was instructed by the High Court to conclude the arbitral proceedings and issue the arbitral award no later than 26th August 2024.

Case Title: Chander Prabha vs LAC & Anr.

Citation: 2024 LiveLaw (HP) 6

Case Number: Arb. Case No. 303 of 2024.

Advocate for the Petitioner: Ms. Shashi Kiran, Advocate

Advocate for the Respondent: Mr. Anup Rattan, Advocate General with Mr. B.N. Sharma, Additional Advocate General, for respondent No. 1/State. Ms. Shreya Chauhan, Advocate, for respondent No.2/NHAI.

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