Supreme Court Issues Notice On Plea Challenging Validity Of Section 3G Of National Highways Act

The writ petition questions the legality of Section 3G(5) of the Act. This section mandates arbitration to resolve disputes over the compensation amount payable to landowners when their land is acquired. The arbitration is to be conducted by an arbitrator appointed by the Central Government.

The petitioner argues that Section 3G(5) violates Article 14 of the Indian Constitution. The contention is that imposing mandatory arbitration, with an arbitrator selected solely by the Central Government, unfairly biases the process against the landowners.

It has further contended that the appointment of an Arbitrator in terms of Section 3G of the Act is contradictory to the judgment of the Supreme Court in the Perkins Eastman v. HSCC^[1] as the Central Government, a party to the dispute, is conferred with the right to unilaterally appoint the arbitrator. It contended that Central Government being an interested party cannot have the right to unilaterally appoint the sole arbitrator. Further, it contended that such a person would be ineligible to be appointed as an arbitrator in terms of Section 12(5) r/w the 5^th & 7^th Schedule to the A&C Act.

The writ petition mentions that as a matter of practice, it is the Deputy Commissioner/Magistrate, a servant of the government, who is appointed as the arbitrator under the Act. The petition also highlights the delays in the appointment of the arbitrator and the consequent arbitral proceedings.

The petitioner has contended that since the arbitrator is a servant of the Central Government, it results in a grave prejudice to the landowners and the compensation paid therein remains insufficient and the arbitrator merely acts as a rubber stamp to the compensation already determined by the Government. It relies upon the judgment of the Supreme Court in NHAI v. M.Hakeem^[2] wherein the said lacunae was noted, however, since the controversy in that case was limited to Section 3J, the Court did not address the concerns arising out of Section 3G(5).

The petition challenges Section 3G(5) on the grounds that it enforces non-consensual arbitration, heavily skewed in favor of the NHAI/Central Government. Additionally, the petition criticizes the exclusion of Section 11 of the A&C Act in this process.

Case Title: B.D. Vivek v. Union of India, Writ Petition Civil No. 1364 of 2023

Date: 12.12.2023

Counsel for the Petitioner: Ms. Madhusmita Bora, AOR with Mr. Pawan Kishore Singh and Ms. Pavithra V.

Counsel for the Respondent: None

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