New Claim For Enhancement Of Compensation From NHAI Based On Subsequent Change Of Land Use ; Barred By Limitation : Madhya Pradesh High Court

The Madhya Pradesh High Court has held that the cause of action for referring the dispute to arbitrator under Section 3G(5) of the National Highways Act, 1956 arises on the date of the determination of the amount of compensation by the competent authority under Section 3G(1) of the Act.

The bench of Justice Milind Ramesh Phadke held that though there is no period of limitation provided for referring the dispute to arbitrator under the said Section, however, it is governed by the residuary clause as contained under Article 137 of the Limitation Act wherein a period of 3 years is provided.

Facts

The petitioner owned a land admeasuring .0209 hectare. Out of the aforesaid land, a piece of 0.020. hectare was diverted from agricultural land to commercial land by the then Commissioner of the district in the year 2006. On 26.12.2012, a land admeasuring 0.009 hectare was acquired by the respondent (NHAI) an amount of Rs. 14,850/- was given as compensation by treating the acquired land as agricultural land instead of commercial land.

The land authorities in the year 2018 made a correction in their revenue records and the land so acquired was labelled as a commercial land. Thereafter, the petitioner, aggrieved by the amount of compensation awarded, filed a reference before the arbitrator under Section 3G(5) of the Act. However, the arbitrator dismissed the reference as barred by limitation.

Aggrieved by the dismissal of the reference, the petitioner filed the writ petition before the High Court challenging the decision of the arbitrator.

Contention of the parties

The petitioner challenged the decision of the arbitrator on the following grounds:

• The cause of action arose in favour of the petitioner only in the year 2018 when the correction was made in the revenue records, therefore, the petition was within the period of limitation.
• Though the award was passed on 26.12.2012, however, it was acquired by the petitioner only in the year 2018, therefore, she filed the reference in the year 2021 within the prescribed limitation period.
• The petitioner is an illiterate lady who was unaware of the law of limitation.

The respondent opposed the petition on the following grounds:

• The award for compensation was passed in the year 2012 and the reference before the arbitrator was filed only in the year 2021, therefore, the petition was hopelessly time barred and the arbitrator rightly dismissed the reference petition.
• There is no period of limitation provided under Section 3G of the National Highways Act, therefore, it is governed by Article 137 of the Limitation Act which provides for a 3-year period of limitation and the reference was filed after a considerable delay which could not be condoned as no reason for the delay was provided by the petitioner.

Analysis by the Court

The Court observed that the award of compensation was passed on 26.12.2012 and the land of the petitioner was treated as an agricultural land and not a commercial land, therefore, the cause of action for referring the dispute to arbitrator arose on the same date in favour of the petitioner, however, the reference before the arbitrator was filed much later in the year 2021 which is patently beyond the period of limitation.

The Court held that the cause of action to refer a dispute to arbitrator arises on the date of the award of compensation and any reference must be made within the limitation period. It held that held that though there is no period of limitation provided for referring the dispute to arbitrator under the said Section, however, it is governed by the residuary clause as contained under Article 137 of the Limitation Act wherein a period of 3 years is provided.

The Court held that the petitioner filed the reference after a delay of 9 years and offered no plausible explanation for the delay, therefore, the arbitrator was right in dismissing the reference.

Case Details: Sarvesh Rajput v. State of Madhya Pradesh, Writ Petition No. 13266 of 2023

Date: 26.06.2023

Counsel for the Petitioner: Akram Khan

Counsel for the Respondent: Vivek Khedkar -AAG

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