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IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.B.SURESH KUMAR, C.S. SUDHA, JJ.
V.G.Thankamani – Appellant
Versus
National Highway Authority Of India – Respondent
ARB.A No. 31 of 2016
Decided on : 09-11-2021
National Highways Act, 1956- Section 3A(1) - Arbitration and Conciliation Act, 1996- Section 26(1) (a)- Acquisition of Land – Grant of compensation - Since the compensation determined by the second respondent for the acquired land and the structures therein was not acceptable to the appellants, they preferred an application under Section 3G(5) of the Highways Act for determination of the compensation by the Arbitrator appointed by the Central Government as provided for therein.
Finding of the Court: Arbitration, albeit lacking state sponsorship, is an adjudicatory system which has a direct bearing on the rights and liabilities of the parties involved. Therefore, it is essential that it shall be concluded in accordance with the principles of natural justice and fairness. Neutrality, impartiality and independence of the adjudicator form the very basis of any adjudicatory system and the same is a requirement of principles of natural justice. The provisions of the Act, especially after Act 3 of 2016, in terms of which the Act has been amended substantially, would show that the scheme of the Act is also that an Arbitrator adjudicating a dispute in terms of the provisions of the Act shall be neutral, impartial and independent. It is trite that only an unbiased adjudicator can be said to be a neutral adjudicator. Similarly, only an adjudicator who is not favouring one party more than another, unprejudiced, disinterested, equitable and just, can be said to be an impartial adjudicator. No doubt, the Collector may not be interested personally in the outcome of the arbitration proceedings, but he cannot, according to us, be said to be a neutral and impartial adjudicator in a proceedings in which the correctness of a report drawn by him and others is arising for consideration. The principle that a dispute shall be adjudicated only by a neutral and impartial adjudicator is a principle of natural justice which is deeply embedded in our jurisprudence and it is therefore a fundamental policy of Indian law. If that be so, the award in the instant case is liable to be set aside under Section 34(2)(b)(ii) of the Act as well, as one in conflict with the public policy of India. The contention that the appellants have not raised this objection before the court below is also without any substance, for if an award is found to be vitiated for non-compliance of the principles of natural justice and consequently in conflict with the public policy of India, according to us, it is irrelevant as to whether the parties have raised such a contention in the proceedings, for violation of the principles of natural justice is a point that could be urged at any stage of the proceedings.
Result: Appeal allowed
JUDGMENT :
P.B.Suresh Kumar, J.
This appeal is directed against the order in O.P. (Arbitration) No.134 of 2012 dated 18.12.2015 on the files of the Additional District Judge, North Paravur. Petitioners 3 to 5 and 7 to 27 in the proceedings are the appellants.
2. The appellants held lands abutting National Highway-47. 347 square meters (0.0347 hectares) of land held by the appellants in Survey No.2426/110 of Aluva West Village was acquired by the second respondent, the competent authority under the National Highways Act, 1956 (the Highways Act) for widening National Highway-47. Though the appellants claimed a sum of Rs.8 lakhs per cent, land value was fixed by the second respondent for the purpose of granting compensation to the appellants only at Rs.5,88,100/-per Are. There were various structures in the acquired land and the value of the same was fixed for the purpose of granting compensation at Rs.5,83,761/-. Since the compensation determined by the second respondent for the acquired land and the structures therein was not acceptable to the appellants, they preferred an application under Section 3G(5) of the Highways Act for determination of the compensation by the Arbitrator appointed by the Central Government as provided for therein. The matter was accordingly referred for arbitration.
3. In the arbitration proceedings, the Arbitrator called for a report as to the value of the acquired land and the structures therein from the District Level Arbitration Committee constituted by the Government as per G.O.(MS) No.239/2005/Arb. dated 27.05.2005 in terms of Section 26(1) (a) of the Arbitration and Conciliation Act, 1996 (the Act). The Committee reported to the Arbitrator that the value of the land fixed by the competent authority does not match with the market price as on the date of the notification made under Section 3A(1) of the Highways Act and recommended that the value of the land needs to be enhanced by 30%. The Arbitrator accepted the report of the Committee and passed an award enhancing the land value as recommended by the Committee.
4. The appellants challenged the award in O.P. (Arbitration) No.134 of 2012 invoking Section 34 of the Act. The court dismissed the original petition holding that the appellants have not made out any ground for interference in terms of Section 34(2) of the Act. The appellants are aggrieved by the decision of the court and hence this appeal.
5. Heard the learned counsel for the appellants, the learned Standing Counsel for the first respondent as also the learned Government Pleader.
6. The learned counsel for the appellants contended that while calling for the report from the Committee in terms of Section 26(1)(a) of the Act, the Arbitrator has not issued notice to the appellants requiring them to give the Committee information and documents relevant for drawing up the report as provided for in Section 26(1)(b) of the Act and therefore, the award passed solely based on the report of the Committee is unsustainable in law. It was also contended by the learned counsel that such an award is liable to be set aside under Section 34(2)(a)(iii) of the Act. It was pointed out by the learned counsel that the Collector of the District was the Arbitrator appointed in terms of the Highways Act and the Collector himself was the Chairman of the Committee from whom report was called for by the Arbitrator under Section 26(1)(a) of the Act. According to the learned counsel, the award, in the circumstances, is liable to be treated as one in conflict with the public policy of India and liable to be set aside on that ground as well.
7. The learned Standing Counsel for the first respondent, the National Highway Authority of India, did not dispute the fact that the appellants were not required to give to the Committee information and documents relevant for drawing up the report called for by the Arbitrator. It was, however, contended that it is not necessary to require the parties to give the relevant information and docu
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