Justice Over Technicality: High Court Extends Arbitral Mandate Despite Procedural Missteps

In a significant ruling, the High Court of Himachal Pradesh has underscored that procedural technicalities should not supersede the delivery of justice. Dealing with a request to extend the timeline for arbitration proceedings, the court held that citing an incorrect legal provision does not inherently disqualify an applicant from receiving relief, provided the court possesses the requisite power to grant it.

The Backdrop: A Case of Missed Deadlines

The dispute originated from the acquisition of land by the National Highways Authority of India (NHAI) for road infrastructure. The petitioners, Mangal Chand and others, had previously secured an order from the High Court on October 30, 2023, granting the arbitrator an additional six months to conclude proceedings in Reference No. 1376 of 2017.

The mandate, however, expired before the proceedings could be finalized. The petitioners’ counsel had failed to download the court’s order and convey it to the arbitrator, leading to a standstill in the case. Seeking to rectify this, the petitioners filed an application under Section 151 of the Code of Civil Procedure (CPC), invoking the court's inherent powers to extend the arbitrator's timeline.

Arguments at the Bar

The respondent, NHAI, vehemently opposed the application. Relying on legal procedure, the NHAI’s counsel argued that an application under Section 151 of the CPC was not maintainable, citing that Section 29A(4) of the Arbitration and Conciliation Act provides the specific statutory mechanism for mandate extensions. They further contended that the petitioners were negligent in their duties, and granting the extension would unfairly burden the NHAI with additional interest payments incurred during the delay.

In turn, the petitioner argued that the delay was a result of administrative oversights by their counsel and emphasized that the landowners should not be penalized for such errors.

The Court’s Reasoning

The High Court acknowledged that the petitioners had mislabeled their filing. Citing the Supreme Court’s decision in My Palace Mutually Aided Coop. Society v. B. Mahesh , the High Court agreed that inherent powers under Section 151 cannot override specific statutory provisions.

However, the court pivoted to the well-settled principle that "mere non-mentioning of an incorrect provision is not fatal to the application if the power to pass such an order is available with the court." Applying this logic, the court held that dismissing a petition solely on the ground of citing Section 151 instead of Section 29A(4) would be an unjust obstacle to a landowner’s constitutional right to receive compensation for acquired property under Article 300A.

Key Observations

The judgment offers a clear view on the court's priority:

• On Counsel Performance: "It is true that the learned counsel representing the petitioner before the learned Arbitrator was negligent... however, the petitioners cannot be penalized for the fault of his counsel."
• On Constitutional Rights: "The land of the applicants/petitioner was acquired by NHAI for the construction of the road. The applicant has a constitutional right under Article 300 A... This right should not be denied due to the fault of the learned counsel."
• On Precedent: "It is well-settled law that mere non-mentioning of an incorrect provision is not fatal to the application if the power to pass such an order is available with the court."

Final Decision and Implications

The High Court allowed the application and granted a six-month window for the arbitrator to conclude the proceedings. The parties were directed to appear before the arbitrator on January 28, 2025.

Regarding the NHAI’s concern over interest liability during the delay, the court provided a practical compromise: the NHAI is permitted to raise the issue of interest payment before the arbitrator, who will decide the merits based on applicable law. This ruling serves as a vital reminder that in cases of land acquisition and compensation, courts will prioritize the substantive rights of citizens over the "letter of the law" in procedural filings.