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The Allahabad High Court has dismissed a petition and held commercial courts cannot entertain applications filed under Section 34 of the Arbitration and Conciliation Act 2013 challenging the quantum of compensation awarded under the National Highways Act (NHA) 1956.
A single-judge bench of Justice J.J. Munir passed this order while hearing a petition filed by Smt Tulsarani and Another.
The petition under Article 227 of the Constitution is directed against an order of the Presiding Officer, Commercial Court, Jhansi dated 28.09.2021, to the extent it directs return of Arbitration Misc Case under Section 34 of the Arbitration and Conciliation Act, 1996, for presentation to the proper Court.
It is common ground between parties that the petitioners’ land comprising a part of Arazi no 73 of Village Raimalpura, Tehsil Kulpahar, District Mahoba, was acquired by the Central Government for widening the National Highway from 89.600 km to 133.520 km.
In this matter, the petitioners’ land aforesaid, ‘the land in question’ was acquired through a Notification dated 18.08.2017, issued and published by the Central Government under Section 3(2) of the National Highways Act 1956. The notification last mentioned was followed by Notification dated 08.12.2017, published in the Gazette Extraordinary dated 08.12.2017 of the Government of India.
Under the said notifications, a total 0.7507 hectare of land was acquired in Village Raimalpura, out of which 0.6587 hectare was found to be agricultural land, while the balance 0.0920 hectare was determined as State land. The land in question is part of the aforesaid total area of land acquired in Village Raimalpura.
A notification was published in two local newspapers dated 22.12.2017, asking persons affected to produce their claims for compensation under Section 3G of the Act of 1956. The first petitioner laid claim to the land in question supported by necessary evidence before the Competent Authority under Section 3G.
The Competent Authority/ Special Land Acquisition Officer, Banda passed an award dated 07.07.2018, assessing compensation for the entire land acquired in Village Raimalpura, including the land in question, on the basis that it is agricultural land. Compensation was determined, treating the land to be agricultural.
The petitioners, aggrieved by the award passed by the Competent Authority dated 07.07.2018, moved the Statutory Arbitrator, appointed by the Central Government under Section 3G(5) of the Act of 1956, seeking enhancement of the compensation awarded. The Statutory Arbitrator, appointed in terms of a notification dated 30.07.2020 issued by the Government of India for acquisitions made in District Mahoba, was notified to be the District Magistrate, Mahoba. The Statutory Arbitrator dealt with all objections relating to the entire land in Village Raimalpura, measuring 0.6587 hectare, that was found to be bhumidhari.
The petitioners’ case relating to a higher rate compensation for the land in question was also dealt with together with those of others, who had approached the Statutory Arbitrator. The Statutory Arbitrator did not accept the petitioners’ contention, as he did not for other land similarly situated that the land in question was residential in character and ought to be compensated for its acquisition at residential rates.
It was held to be agricultural. In agreement with the Competent Authority, the Statutory Arbitrator/ District Magistrate, Mahoba upheld the Competent Authority’s award dated 07.07.2018 by his arbitral award dated 10.12.2020.
The petitioners, like others, aggrieved by the Statutory Arbitrator’s award, moved the Commercial Court, Jhansi under Section 34 of the Arbitration and Conciliation Act, 1996 with a prayer to set aside the Statutory Arbitrator’s award.
All the applications by landholders of acquired land in Village Raimalpura, who were aggrieved by the Statutory Arbitrator’s award dated 10.12.2020, were consolidated and heard together with Arbitration Misc Case being treated as the leading case.
The Court noted,
The Commercial Court, Jhansi held that the Statutory Arbitrator’s award could not be questioned under Section 34 of the Act of 1996 and the petitioners’ remedy was to seek a reference under Section 67 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 to the Land Acquisition and Rehabilitation and Resettlement Authority, constituted under Section 51 of the Act of 2013.
Accordingly, the Presiding Officer, Commercial Court, Jhansi directed return of the applications under Section 34 of the Act of 1996 under Order VII Rule 10 CPC for presentation to the proper Court. It was further directed that in case steps were not taken to take back the applications, the applications would stand rejected under Order VII Rule 11 (d) CPC.
It is the order of the Presiding Officer, Commercial Court, Jhansi that the petitioners have impugned in the petition.
Upon hearing the Counsel for parties and perusing the impugned judgment, the Court found that the Presiding Officer, Commercial Court may not be wrong in saying that he does not have the jurisdiction to entertain the application under Section 34 of the Act of 1996, but he is certainly wrong in thinking that the award of the Statutory Arbitrator under Section 3G(5) of the Act of 1956 cannot be challenged by an application under Section 34 of the Act, last mentioned. Sub-Section (6) of Section 3G clearly mentions that subject to the provisions of the Act of 1956, the provisions of the Act of 1996 shall apply to every arbitration under the former Act. There is nothing in the scheme of Section 3G of the Act of 1956 to exclude the application of Section 34 vis-à-vis the award of the Statutory Arbitrator, passed under Section 3G(5) of the Act of 1956. An award by the Statutory Arbitrator may be questioned before the Court of competent jurisdiction under Section 34 of the Act of 1996, like any other award by an Arbitrator.
The Court opined that the Commercial Court was misled by the application of the provisions of the Act of 2013 relating to determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule to acquisitions made under the Act of 1956, by including it in the Fourth Schedule to the Act of 2013. The said provisions of the Act of 2013 have been made applicable to acquisitions under the Act of 1956 by the Central Government issuing an order in exercise of powers under sub-Section (1) of Section 113 of the Act of 2013.
The Court held that the provisions of the Act of 2013 have been made applicable to acquisitions under the Act of 1956 for the limited purpose of calculation of compensation and entitlement to solatium, interest etc. in order to place land oustees under both the statutes at par. It is not that the entire procedure, including remedies for determination and assailing the quantum of compensation awarded under the Act of 1956, have been subsumed by the Act of 2013 by the limited extension of certain benefits under the Act of 2013 to acquisitions made under the Act of 1956. The provisions of reference to the Land Acquisition, Rehabilitation and Resettlement Authority under the Act of 2013 for the purpose of seeking enhancement of compensation awarded available to a land oustee, would not be available to a land oustee, whose land is acquired under the Act of 1956. His remedies are confined to the four corners of Section 3G of the Act of 1956.
“The principles in Richa Bisht (supra) are squarely applicable to the facts here, because the petitioners’ land has been acquired for the purpose of a National Highway. It is by no means a ‘commercial dispute’ within the meaning of Section 2(1)(c) of the Commercial Courts Act, 2015. For the said reason, the application under Section 34 of the Act of 1996 would not be maintainable before the Commercial Court. Thus, for reasons very different from those that have weighed with the Commercial Court in passing the order impugned, the Court concurs in the conclusions reached”, the Court observed while dismissing the petition.
“It is made clear that upon return of the application under Section 34 of the Act of 1996 to the petitioners, it would be open to them, subject of course to the law of limitation, to institute proceedings, if so advised, before the Court of competent jurisdiction, entitled to hear an application under Section 34 of the Act of 1996,” the order reads.