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SUPREME COURT OF INDIA
N.V. RAMANA, MOHAN M. SHANTANAGOUDAR, AJAY RASTOGI, JJ.
NATIONAL HIGHWAYS AUTHORITY OF INDIA – Appellant
Versus
SAYEDABAD TEA COMPANY LTD. & ORS. – Respondent
Civil Appeal Nos. 6958-6959 of 2009 with Civil Appeal Nos. 6965-6966 of 2009
Decided On : 27-08-2019
(a) Interpretation of statute - National Highways Act, 1956, special statute and Arbitration and Conciliation Act, 1996 a general statute - Act 1956 a complete code in itself - Held Act, 1956 shall prevail over Act 1996 - Hence section 3G(5) for appointment of arbitrator shall be applicable and not section 11(6) of Act, 1996. (Para 19)
(b) National Highways Act, 1956 - Section 3G(6) - Stipulating applicability of provisions of Act, 1996 “subject to” provisions of the Act, 1956 - By using expression "subject to" legislature intended to give overriding effect to provisions of Act, 1956. (Para 20)
(c) National Highways Act, 1956 - Section 3G(6) and section 11(6), Arbitration and Conciliation Act, 1996 - Power of appointing arbitrator exclusively vested in Central Government by section 3G(5) - Held, application filed under Section 11(6) of Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator was not maintainable. (Para 23)
(d) National Highways Act, 1956 - Section 3G(5) - Power to appoint arbitrator exclusively vested in Central Government - No statutory time limit prescribed - However despite no time limit being prescribed, power must be exercised within a reasonable time period - If no action is taken within reasonable time, respondent had the remedy of writ petition under Article 226, Constitution of India - But provisions of Arbitration and Conciliation Act, 1996 have no application. (Para 24)
(e) Administration of justice - Arbitrator appointed by High Court u/s 11(6), Arbitration and Conciliation Act, 1996 recusing - Arbitrator appointed by Central Government during pendency of application u/s 11(6), Arbitration and Conciliation Act, 1996 could not proceed due to litigation - He too finally recused - 12 years lapsing in the process - Central Government directed to appoint arbitrator u/s 3G(5), National Highways Act, 1956 without requiring respondent to file an application therefor. (Para 25)
Facts of the case:
The subject land comprised in "Sayedabad Tea Estate" Dist. Darjeeling measuring 5.08 acres was acquired by the appellant in exercise of its powers under Section 3(D) of the Act 1956 for the purpose of construction of the highways.
The respondent-applicant being dissatisfied with the award of compensation determined by the competent authority under sub-section (1) of Section 3G of the Act, 1956 filed application for appointment of an Arbitrator in terms of Section 3G(5) to the Central Government on 8th December, 2006. As alleged, since the Central Government has not responded to his request for appointment of an Arbitrator in terms of letter dated 8th December, 2006 within a period of 30 days from receipt of the request, application was filed on 7th March, 2007 to the Chief Justice/his designate of the High Court for appointment of an Arbitrator invoking Section 11(6) of the Act, 1996. It reveals that the Arbitrator was appointed by the Central Government sometime in April 2007.
The High Court taking note of the fact that the Arbitrator has been appointed by the Central Government under Section 3G(5) of the Act, 1956 after the respondent-applicant had moved an application to the Chief Justice/his Designate invoking its power under Section 11(6) of the Act, 1996 held that right of appointment of the Arbitrator by the Central Government stands forfeited as it failed to appoint the Arbitrator until filing of the application under Section 11(6) of the Act, 1996 before the High Court and appointment of Arbitrator during the pendency of proceedings, cannot be said to be a valid appointment and hence referred the matter to be placed before the Chief Justice for naming an Arbitrator.
The appellant moved an application for review and it was brought to the notice of the High Court that the Act, 1956 being a special enactment laying down a procedure for appointment of an Arbitrator where the power is being exclusively vested with the Central Government under Section 3G(5) of the Act, 1956, the application made under Section 11(6) of the Act, 1996 is not maintainable. The review petition was dismissed.
Finding of the Court:
In view of section 3G(5) and (6), provisions of Act, 1996 do not apply to instant case.
Result: Appeal allowed.
JUDGMENT :
AJAY RASTOGI, J.
1. The moot question which arises before us is whether the application under Section 11 of the Arbitration and Conciliation Act, 1996(hereinafter being referred to as "Act 1996") is maintainable in view of Section 3G(5) of the National Highways Act, 1956 (hereinafter being referred to as "Act 1956") which provides for appointment of an Arbitrator by the Central Government.
2. The relevant seminal facts are that the subject land comprised in "Sayedabad Tea Estate" situated at Mouza Purba Madati, J.L. No. 108, Police Station Phansidewa, Dist. Darjeeling measuring 5.08 acres was acquired by the appellant (National Highways Authority of India) in exercise of its powers under Section 3(D) of the Act 1956 vide notification dated 22nd November, 2005 under L.A.P. Case No. 4/2004-05 for the purpose of construction of the highways.
3. The Act, 1956 is a comprehensive code in itself and a special legislation enacted by the Parliament for acquisition and for determining compensation and its disbursement where there are several claimants over the amount deposited towards compensation determined by the competent authority in accordance with the mechanism provided under Section 3G of the Act, 1956. If the amount so determined by the competent authority under sub-section(1) or sub-section (2) of Section 3G is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the Arbitrator to be appointed by the Central Government under Section 3G(5) of the Act. While determining the amount of compensation under sub-section(1) or sub-section(5), it is the duty of the Arbitrator to take into consideration the relevant pointers envisaged under sub-section(7) of Section 3G of the Act, 1956. Where the amount determined by the Arbitrator is in excess of the amount determined by the competent authority under Section 3G of the Act, 1956, the Arbitrator may, at its discretion, award interest at nine per cent per annum on the excess amount under sub-section (5) of Section 3H from the date of taking possession under Section 3D till the date of actual deposit.
4. The extract of the sections of the Act 1956 relevant for the purpose are as under:-
"3G. Determination of amount payable as compensation.–
(1) .........
(2) .........
(3) .........
(4) .........
(5) If the amount determined by the competent authority under sub-section (1) or sub-section (2) is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the arbitrator to be appointed by the Central Government.
(6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act.
(7) The competent authority or the arbitrator while determining the amount under sub-section (1) or subsection (5), as the case may be, shall take into consideration
(a) the market value of the land on the date of publication of the notification under section 3A;
(b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change.
3H. Deposit and payment of amount.–
(1).......
(2) .......
(3).......
(4).......
(5) Where the amount determined under section 3G by the arbitrator is in excess of the amount determined by the competent authority, the arbitrator may award interest at nine per cent, per annum on such excess amount from the date of taking possession under section 3D till the date of the actual deposit there
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