National Highways Authority of India v. Devassy C.M. and Others (W.A. 1364/2022)

W.A. 1364/2022 -:1:- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 13[TH] DAY OF OCTOBER 2022 / 21ST ASWINA, 1944 WA NO. 1364 OF 2022 [AGAINST THE JUDGMENT IN WP(C) NO.21796/2019 DATED 7.4.2022 OF THE LEARNED SINGLE JUDGE] ## APPELLANT/3RD PARTY FILING WITH LEAVE: NATIONAL HIGHWAY AUTHORITY OF INDIA PIU, PALAKKAD,NO.310-A, CHANDRA NAGAR EXTENSION, P.O.CHANDRA NAGAR, PALAKKAD - 678 007, REPRESENTED BY THE PROJECT DIRECTOR. BY ADV SRI. K.A.SALIL NARAYANAN ## RESPONDENTS/PETITIONERS & RESPONDENTS: - 1 DEVASSY C.M., AGED 46 YEARS S/O.LATE MATHEW, CHAMAVALAPPIL HOUSE, POTTA, POTTA P.O.,THRISSUR. - 2 THE ARBITRATOR (NATIONAL HIGHWAYS ACT 1956) AND THE DISTRICT COLLECTOR,COLLECTORATE, THRISSUR - 680 001. - 3 THE SPECIAL DEPUTY COLLECTOR SLAO AND COMPETENT AUTHORITY (LA), NHDP, THRISSUR - 680 020. - 4 THE STATE OF KERALA REPRESENTED BY ITS SECRETARY, REVENUE DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. R1 BY ADV. SRI. T RAJASEKHARAN NAIR THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 13.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A. 1364/2022 -:2:- ## **JUDGMENT** ## **S. Manikumar, CJ** Instant writ appeal is filed by a third party, viz., National Highways Authority of India, represented by its Project Director, Palakkad, against the judgment dated 7.4.2022 passed in W.P.(C) No.21796/2019, by which, writ court allowed the writ petition filed by the 1[st] respondent challenging the order dated 1.7.2019 passed by the Arbitrator (National Highways Act, 1956) & District Collector, Thrissur rejecting the application for enhancement of land value for the property acquired for National Highway solely on the ground that it has been filed beyond the statutory period of limitation. 2. W.P.(C) No.21796/2019 was filed by the 1[st] respondent for the following reliefs: - (i) Call for the records pursuant to Exhibit-P6 order and quash the same by issuing a writ of certiorari or other appropriate writ; - (ii) Issue a writ of mandamus or any other appropriate writ or order or direction, directing the 1[st] respondent - the District Collector, Thrissur, to reconsider the claim of the writ petitioner and pass an award on merit, without the time prescribed by the court; - (iii) To declare that petitioner and other legal heirs of deceased Mathew are eligible to get enhanced compensation for the land acquired for public purpose, by issuing a writ of mandamus or any other appropriate order. W.A. 1364/2022 -:3:- 3. Before the writ court, it is the case of respondent No.1/writ petitioner that the property belonging to his father, which later devolved on him and other siblings on the father's death, was acquired by Union of India, for the purpose of widening National Highway 544 and as the compensation determined by the Competent Authority under Land Acquisition (CALA) was every meagre, petitioner made an application for re-determination of compensation before the Arbitrator. Since the Arbitrator has rejected the request for the reason that it is highly belated, more than 6 years and 2 months, the petitioner has filed the writ petition for the reliefs stated supra. 4. Vide judgment dated 7.4.2022, writ court, allowed W.P.(C) No.21796/2019, by giving the following directions: “4. When I consider the afore submissions, it is without doubt that one cannot find fault with Ext.P6, because the petitioner appears to have supported his application for condonation of delay merely saying that he was not aware of the rigor of limitation. Obviously, therefore, the Statutory Arbitrator was justified in having rejected it for the reason that sufficient cause for condonation of delay had not been established. 5. However, it must be borne in mind that not all citizens are well-versed in law and that it is possible that some of them may not be aware that there are fixed periods of limitation for the purpose of invoking jurisdiction. This is precisely why the stipulation of the Limitation Act is made applicable in such matters. Since the W.A. 1364/2022 -:4:- petitioner says that he is not a legally trained person and that he is from a very disadvantaged background, I am certainly of the view that he must obtain some lenitude, which I am sure this Court will be justified in granting to him. 6. Resultantly and also because the petitioner has sought enhancement of compensation based on certain valid documents, I deem it appropriate to order this writ petition and to grant relief. In the conspectus of the afore, I order this writ petition and set aside Ext.P6; thus allowing the application filed by the petitioner for condonation of delay in preferring Ext.P3 Arbitration Request; with a consequential direction to the 1[st] respondent – Arbitrator to take up Ext.P3 application of the petitioner and dispose it of on its merits, after affording him and the official concerned of the NHAI an opportunity of being heard and after examining all his documents; thus culminating in an appropriate order and necessary action thereon, as expeditiously as is possible. I also leave liberty to the petitioner to approach this Court after a period of eight months from the date of receipt of a copy of this judgment, if Ext.P3 is not disposed of till then, seeking fixing of a time frame for such purpose, which shall then be considered, taking note of the then prevalent circumstances.” 5. Appellant has contended that though NHAI was a necessary party to the writ petition, they were not arrayed as respondent, but still the learned single Judge allowed the writ petition by condoning the delay and directing the Arbitrator to consider the application for redetermination on merits submitted by the writ petitioner and others, after hearing all the parties. Aggrieved by the above, instant writ appeal W.A. 1364/2022 -:5:- has been filed by the appellant. 6. Appellant has further contended that writ court failed to appreciate the fact that writ petition was bad for non joinder of necessary parties, in as much as the appellant was a party to the _lis_ before the Arbitrator and opposed the claim of the writ petitioner in the arbitration proceedings before the District Collector. Though the interest of the appellant was directly affected by the impugned judgment, writ court, chose to pass a judgment, without the appellant being a party and by doing so, learned single Judge has not followed the fundamental principles of law, doctrine of _Audi Alteram Partem_ . 7. On the above averments, I.A. No.1 of 2022 was filed seeking leave to challenge the judgment in W.P.(C) No.21796/2019 dated 7.4.2022, which was allowed vide order dated 1.9.2022. 8. On the grounds raised, Mr. Salil Narayanan, learned counsel for the appellant, further contended that it is trite law that an award passed by an Arbitrator under the provisions of Arbitration and Reconciliation Act, 1996 can be challenged only under Section 34 and, therefore, writ petition was not maintainable in law and ought to have been dismissed at the threshold. W.A. 1364/2022 -:6:- 9. He further contended that the application for re-determination of compensation for acquisition of land filed by the writ petitioner before the Arbitrator was dismissed on the ground of delay. According to the appellant, dismissal of the claim under the Arbitration Act constitutes an award, as contemplated therein, and therefore, the statutory remedy available to the writ petitioner is to approach the Principal Civil Court, as provided under Section 34, and not to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. 10. Referring to the observation of learned single Judge in paragraph (5) of the impugned judgment, learned counsel for the appellant contended that the maxim _'ignorantia juris non excusat'_ postulates that ignorance of law cannot be an excuse, and therefore, the said observation is opposed to the fundamental legal principle and cannot be countenanced in law. 11. _Per contra_ , inviting the attention of this Court to paragraph (2) of Exhibit-P6 dated 1.7.2019, Mr. T. Rajasekharan Nair, learned counsel for the 1[st] respondent/writ petitioner, submitted that the Revenue Divisional Officer was one of the members of the District Level Arbitration Committee, constituted under the National Highways Act, W.A. 1364/2022 -:7:- 1956 and he cannot feign ignorance of the fact that many landowners have filed petitions for enhancement of compensation. 12. Inviting the attention of this Court to paragraph (6) of the impugned judgment in W.P.(C) No.21796/2019 dated 7.4.2022, learned counsel for the 1[st] respondent further submitted that what has been directed by the writ court is to take up Exhibit-P3 representation and dispose of the same on merits, after affording an opportunity of being heard to NHAI, the appellant, and after considering all the documents, the aforesaid direction has been issued duly considering the social background of the 1[st] respondent and awareness of such persons, as to the period of limitation fixed. 13. Heard the learned counsel for the parties and perused the material on record. 14. Exhibit-P6 is the impugned order dated 1.7.2019 passed by the District Collector, Thrissur, respondent No.1 in the writ petition, and it reads as under: ## “ **Order No.65/2019 in LAC 1026/06 (Perambra Village); Dated 01/07/2019** The Government of India as Part of the National Infrastructure Development Programme have taken up W.A. 1364/2022 -:8:- widening of National Highways as four lane and six lane roads with service roads, flyovers and bus-bays wherever required. In Kerala State, National Highways 47 and 17 are taken up under the above Project. The lands required for the above National Highways are being acquired under the National Highways Act, 1958 (A 48 of 1956). In Thrissur District, the Special Deputy Collector NHDP, Thrissur, is authorised to function as SLAO and Competent Authority vide Government of India Gazette Notification No.437, dated 15.05.2004. Thereafter, Government of India vide order No.RW/NH/37011/47/2003-PIC dated 29.12.2004 had appointed the District Collector, Thrissur as Arbitrator. 2. Under Sub Section 6 of Section 3G of the NH Act, the Provisions of Arbitration and Conciliation Act, 1996 (Act 26 of 1996) shall apply to every arbitration under this Act. The Government of Kerala as per GO(MS) No.238/2008/RD, dated 27.07.2005 has constituted a strict Level Arbitration Committee under the Chairmanship of District Collector. The Committee consists of Revenue Divisional Officer, Finance Officer, Collectorate; an officer designated by the Project Authority (NHAI) and Executive Engineer NH as the nominee of the Secretary, Fast Track Project, Government of Kerala. Under the Arbitration and Conciliation Act, 1990, Section 26(1)(a) the Arbitral Tribunal may appoint one or more experts to report to it on specific issues to be determined by the Arbitral Tribunal. The District Level Arbitration Committee appointed by the Government in the above order is appointed by this Arbitrator to function as Expert Committee under Section 26(1)(a) of Arbitration and Conciliation Act, 1996. Many landowners in Thrissur District have filed Arbitration Petitions to get enhanced compensation for the properties taken over. These Petitioners are among them. 3. The Petitioners are the landowners whose land was acquired and taken over under the provisions of National Highways Act, 1956 for the development of National Highway 47. A total extent of land measuring 0.0030 hectares in survey No. 80/1-118 of Perambra Village, Chalakkudy Taluk was acquired from the Petitioners. W.A. 1364/2022 -:9:- 4. Being aggrieved by the quantum of compensation awarded by the Counter Petitioners, the Petitioner has filed this Arbitration Petition under Section 36(5) of the National Highways Act, 1956 and requested to award enhanced compensation for the properties taken over. 5. The case was posted for hearing on 01/07/2019, 11.30 am after issuing due notices to all concerned and the Party was heard in the presence of the Expert Committee. The main contentions of the Petitioners are:- 5.a. The 1[st] Petitioner Smt. Mary has submitted an Arbitration Claim on 18/05/2017. The 3[rd] Claimant Sri. Devassy has also submitted an Arbitration Claim on 01/01/2019. The Party has contended that the SLAO has not taken into account actual market value in respect of the land acquired while fixing compensation. The Petitioners have therefore claimed 65% of the amount Awarded by the SLAO being enhanced compensation. At the time of hearing Sri. Devassy the 3[rd] Claimant has stated as follows: xxxxxxxxxxxxxxxxx 6. On the other hand the Respondents have stated that the application is time barred, land value was fixed based on the sale documents of similar and similarly situated properties, registered in the vicinity of the land acquired, and that the Government PWD rate schedule has been based for valuing structures, that the Petitioners are not entitled to get capitalized value for trees in addition to full land value. 7. Following points arose for consideration in this arbitration case and answered accordingly as given hereunder. 7.1. The main issue to be decided in this claim is whether the Arbitration Claim is admissible in view of abnormal delay in filing the Arbitration Claim Petition: Under Section 43(1) of the Arbitration Conciliation Act, 1996, the Limitation Act 1963 (Act 38 of 1963) shall apply to arbitration as it applies to proceedings in Court in W.A. 1364/2022 -:10:- the matter of this claim the 1[st] Claimant Smt. Mary filed a claim before the Arbitrator on 18.05.2017. The 3[rd] Claimant Sri. Devassy has filed another claim on 01/01/2019. As per the details produced before this Tribunal payment of the admissible amount of land value etc. was paid by the SLAO and CALA on 13.03.2008. The schedule prescribed under the Limitation Act, 1963, Article 137 states that for any other application for which no period of limitation is provided elsewhere in this division is 3 years, from the date from which the right to apply accrues. From the above provision in the Limitation Act it is clear that the Claimants have to file the arbitration claim within 3 years from the date of payment by the SLAO & CALA ie., on or before 12/03/2011. But the 1[st] Claimant had filed the Arbitration Claim only on 18/05/2017 i.e., after a lapse of more than 6 years and 2 months. In the meanwhile, the 3[rd] Claimant Sri. Devassy. C.M., filed WP(C) 10483/19 before the Hon. High Court of Kerala and the Court in the judgment dated 06/06/2019 has decided as follows: "It appears that there is a considerable delay in approaching the District Collector for enhancement of compensation. Anyhow, the District Collector as an Arbitrator shall decide this matter after hearing all concerned. There shall be a direction to the District Collector to dispose Ext.P3 in accordance with law including with reference to the issue of limitation within a period of two months" In the light of the above details, no sufficient grounds are adduced before this Tribunal to condone the delay. At the time of hearing the Party has only contended that “for the delay, he has nothing to submit because he was not aware of it” (translated version). In view of the considerable delay of more than 6 years and 2 months, the claim cannot be considered with reference to the specific W.A. 1364/2022 -:11:- provision in the Limitation Act 1963, the claim is therefore not maintainable and rejected. Sd. Regi P. Joseph (in charge of DC) Arbitrator & District Collector, Thrissur.” 15. Arbitration and Reconciliation Act, 1996 is an Act to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith or incidental thereto. 16. From the material on record, it could be deduced that the Special Deputy Collector, SLAO and Competent Authority (LA) NHDP, Thrissur, fixed the compensation on 28.07.2008. In response to a notice under 3G(3) of the National Highways Act, 1956 and as per Exhibit-P1 dated 13.03.2008, legal representatives have received the compensation. Even in Exhibit-P1 proceedings dated 13.03.2008, it is clearly stated that if the amount determined by the Competent Authority is not acceptable to either of the parties, application can be filed by either of the parties before the Arbitrator under Section 3G(5) of the National Highways Act, 1956. Such an application has been filed by one of the parties, viz., Exhibit-P3, on 1.1.2019. W.A. 1364/2022 -:12:- 17. Sections 3G(3) and 3G(5) of the National Highways Act, 1956, referred to above, are reproduced: “ **3G. Determination of amount payable as compensation.** — (1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by an order of the competent authority. Xxxxxxxxxxxx (3) Before proceeding to determine the amount under sub-section (1) or sub-section (2), the competent authority shall give a public notice published in two local newspapers, one of which will be in a vernacular language inviting claims from all persons interested in the land to be acquired. ## xxxxxxxxxxxxxxx (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-- ## xxxxxxxxxxxxxx” 18. Vide judgment dated 6.6.2019 in W.P.(C) No. 10483/2019, Exhibit-P3 application has been directed to be disposed of, which resulted in Exhibit-P6 order dated 1.7.2019 of the Arbitrator (National Highways Act, 1956) & District Collector, Thrissur. 19. After considering the application of Limitation Act, 1963, with reference to Section 43(1) of the Arbitration and Conciliation Act, 1996, W.A. 1364/2022 -:13:- application for enhancement has been rejected for the reason that no sufficient grounds are adduced before the Arbitrator. 20. Compensation amount has been determined on 13.03.2008. Thereafter, the same has been received. Indisputably, the application for enhancement of compensation has been submitted on 1.1.2019, after 6 years and 2 months. Even applying the provisions of Limitation Act, 1963, wherein as per Article 137 of the said Act, for any other application for which no period of limitation is provided elsewhere in this division is 3 years, from the date from which the right to apply accrues. 21. Even assuming without admitting for argument sake, that the law relating to condonation is also applicable, Court has to see as to whether the applicant has adduced _bona fide_ reasons for condonation of delay and as to whether the discretion exercised is just and proper. 22. In the case on hand, the reason adduced by the 1[st] respondent before the Arbitrator, viz., the District Collector, Thrissur, is that, “for the delay, he has nothing to submit, because he was not aware of it”. 23. Writ court, observing that not all the citizens are well versed in law and that it is possible that some of them may not be aware that there W.A. 1364/2022 -:14:- are fixed period of limitation for invoking the jurisdiction, has directed the Arbitrator, viz., the District Collector, Thrissur, to consider Exhibit-P3 application, once again as stated supra. 24. Firstly, as rightly contended by Mr. Salil Narayanan, learned counsel for the appellant, Exhibit-P6 dated 1.7.2019 passed by the District Collector, Thrissur, is an award in terms of the provisions of Arbitration and Conciliation Act, 1996 and that the same can be challenged under Section 34 of the Act, 1996. 25. Section 34 of the Act, which speaks about recourse to arbitral award, reads as under: “ **34. Application for setting aside arbitral award** .—(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if— (a) the party making the application establishes on the basis of the record of the arbitral tribunal that— (i) a party was under some incapacity; or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator W.A. 1364/2022 -:15:- or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that— (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. _Explanation 1_ .—For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,— (i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. _Explanation 2_ .—For the avoidance of doubt, the test as to whether there is a contravention with the W.A. 1364/2022 -:16:- fundamental policy of Indian law shall not entail a review on the merits of the dispute.] (2-A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the court, if the court finds that the award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.] **(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the arbitral tribunal** : **Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter** . (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award. (5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a W.A. 1364/2022 -:17:- period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.]” (emphasis supplied) 26. Thus, as rightly contended by Mr. Mr. Salil Narayanan, learned counsel for the appellant, writ petition itself ought not to have been entertained. Reasons assigned by the writ court in the impugned judgment for setting aside Exhibit-P6 order of the District Collector, Thrissur dated 1.7.2019 is ' _ignorantia juris non excusat'_ . Even though the 1[st] respondent has been put on notice that any one of the parties for determination of the compensation amount can move the Arbitrator, viz., the District Collector, Thrissur, way back in 2008, application has been filed only on 1.1.2019, after 6 years and 2 months. 27. As rightly contended by Mr. Salil Narayanan, learned counsel for the appellant, the said principle applies to the case on hand. 28. That apart, in **Swadeshi Cotton Mills Co. Ltd. v. Government of U.P.** [(1975) 4 SCC 378], the Hon'ble Supreme Court held that every individual is deemed to know the law of the land. The courts merely interpret the law and do not make law. Ignorance of law is not an excuse for not taking appropriate steps within limitation. Therefore, the argument that the appellant did not know the true legal position is not W.A. 1364/2022 -:18:- one that can be accepted in law. If ignorance of law can be condoned, in the matter of Land Acquisition proceedings, and in particular payment of compensation, by condoning delay, without any _bona fide_ reasons, with due respect, in our view, it will open Pandora’s box. 29. Yet another aspect to be considered is, whether the discretion exercised by the Arbitrator/District Collector, Thrissur is proper. Reference can be made to a few decisions: (i) In **Suman Gupta and Others v. State of Jammu and Kashmir and Others** [AIR 1983 SC 1235], while explaining as to how administrative discretion should be exercised, at paragraph No. 6, the Hon'ble Supreme Court held as under: "The exercise of all administrative power vested in public authority must be structured within a system of controls informed by both relevance and reason -relevance in relation to the object which it seeks to serve, and reason in regard to the manner in which it attempts to do so. Wherever the exercise of such power affects individual rights, there can be no greater assurance protecting is valid exercise than its governance by these twin tests. A stream of case law radiating from the now well known decision in this Court in _Maneka Gandhi v. Union of India_ [(1978) 1 SCC 248] has laid down in clear terms that Article 14 of the Constitution is violated by powers and procedures which in themselves result in unfairness and arbitrariness. It must be remembered that our entire constitutional system is founded in the rule of law, and in any system so designed it is impossible to conceive of legitimate power which is arbitrary in character and travels beyond the bounds of reason. In the above reported judgment, the Hon'ble Apex Court further held that, "We do not doubt that in the realm of administrative power the element of discretion may W.A. 1364/2022 -:19:- properly find place, where the statute or the nature of the power intends so. But there is a well recognised distinction between an administrative power to be exercised within defined limits in the reasonable discretion of designated authority and the vesting of an absolute and uncontrolled power in such authority. One is power controlled by law countenanced by the Constitution, the other falls outside the Constitution altogether." (ii) Reiterating as to how the discretionary power has to be exercised, the Hon'ble Supreme Court in **Sant Raj and Another v. O.P. Singla and Others** [AIR 1984 SC 1595 : (1985) 2 SCC 349], held as under: "Whenever, it is said that something has to be done, within the discretion of the authority, then that something has to be done, according to the rules of reason and justice and not according to private opinion, according to law and not humour. It is to be not arbitrary, vague and fanciful but legal and regular and it must be exercised within the limit to which an honest man to the discharge of his office ought to find himself. Discretion means sound discretion guided by law. It must be governed by rule, not by humour, it must not be arbitrary, vague and fanciful. (iii) In **Fasih Chaudhary v. Director General, Doordarshan and Others** [AIR 1989 SC 157 and (1989) 1 SCC 89], the Hon'ble Supreme Court held that exercise of discretion should be legitimate, fair and without any aversion, malice or affection. Nothing should be done which may give the impression of favouritism or nepotism. While fair play in action in such matters is an essential requirement, “free play in the joints” is also a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere as the present one. (iv) While considering litigation arising out of Bangalore Development Authority Act, 1976, the Hon'ble Supreme Court in **Bangalore Medical Trust v. B.S. Muddappa and Others** [AIR 1991 SCC 1902], held as under: "Discretion is an effective tool in administration. It provides an option to the authority concerned to adopt one or the other alternative. But a better, proper and legal exercise of W.A. 1364/2022 -:20:- discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better. When a statute either provides guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it. Even where statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbitrarily. It should be guided by reasonableness and fairness. The legislature never intends its authority to abuse the law or use it unfairly. Where the law requires an authority to act or decide, 'if it appears to it necessary' or if he is 'of opinion that a particular act should be done' then it is implicit that it should be done objectively, fairly and reasonably. In a democratic set up the people or community being sovereign the exercise of discretion must be guided by the inherent philosophy that the exerciser of discretion is accountable for his action. It is to be tested on anvil of rule of law and fairness or justice particularly if competing interests of members of society is involved. Decisions affecting public interest or the necessity of doing it in the light of guidance provided by the Act and rules may not require intimation to person affected yet the exercise of discretion is vitiated if the action is bereft of rationality, lacks objective and purposive approach. Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal exercise of power. It must withstand scrutiny of the legislative standard provided by the statute itself. The authority exercising discretion must not appear to be impervious to legislative directions. The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for which power is exercised. No one howsoever high can arrogate to himself or assume without any authorisation express or implied in law a discretion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it renders the action ultra virus and bad in law. (v) In **Shiv Sagar Tiwari v. Union of India and Others** [AIR 1997 SC 1483], the Hon'ble Supreme Court held that the discretionary power has to be exercised to advance the performance, to sub-serve for which the power exists. W.A. 1364/2022 -:21:- (vi) In **Rakesh Kumar v. Sunil Kumar** [AIR 1999 SC 935], the Hon'ble Supreme Court held that administrative action/quasi-judicial function is the duty of the authority to give reasons/record reasons/and it should be a speaking order. (vii) In **A.P. Aggarwal v. Govt. of NCT of Delhi** [AIR 2000 SC 205: (2000) 1 SCC 600], the Hon'ble Supreme Court held as under: "The conferment of power together with a discretion which goes with it to enable proper exercise of the power and therefore it is coupled with a duty to shun arbitrariness in its exercise and to promote the object for which the power is conferred which undoubtedly is public interest and not individual or private gain, whim or caprice of any individual." (viii) In **Indian Railway Construction Co. Ltd. v. Ajay Kumar** [AIR 2003 SC 1843 : (2003) 4 SCC 579], at paragraphs No. 13 to 15, the Hon'ble Supreme Court explained the manner in which discretionary power has to be exercised, while discharging an administrative function. In the above judgment, the Supreme Court held that in matters relating to administrative functions, if a decision is tainted by any vulnerability as such illegality, irrationality and procedural impropriety, Courts should not hesitate to interfere, if the action falls within any of the categories stated supra. "14. The present trend of judicial opinion is to restrict the doctrine of immunity from judicial review to those class of cases which relate to deployment of troops, entering into international treaties etc. The distinctive features of some of these recent cases signify the willingness of the courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is "illegality", the second "irrationality", and the third "procedural impropriety". These principles were highlighted by Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service (commonly known as CCSU case). If W.A. 1364/2022 -:22:- the power has been exercised on a non-consideration or nonapplication of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. (See CIT v. Mahindra and Mahindra Ltd.) The effect of several decisions on the question of jurisdiction has been summed up by Grahame Aldous and John Alder in their book Applications for Judicial Review, Law and Practice thus: "There is a general presumption against ousting the jurisdiction of the courts so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however, certain areas of governmental activity, national security being the paradigm, which the courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the Government's claim is _bona fide_ . In this kind of non- justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the Royal Prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service **Unions v. Minister for the Civil Service** this is doubtful. LORDS Diplock, Scarman and ROSKILL appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject-matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including the prerogatives relating to the civil service where national security is not involved. Another non-justiciable power is the AttorneyGeneral's prerogative to decide whether to institute legal proceedings on behalf of the public interest." (Also see _Padfield v. Minister of Agriculture, Fisheries and Food_ ) 15. The court will be slow to interfere in such matters relating to administrative functions unless decision is tainted by any vulnerability enumerated above: like illegality, irrationality and procedural impropriety. Whether the action falls within any of the categories has to be established. Mere assertion in that regard would not be sufficient. W.A. 1364/2022 -:23:- 17. Before summarizing the substance of the principles laid down therein we shall refer to the passage from the judgment of _**LORD GREENE in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn.**_ (KB at p. 229 : All ER pp. 682 H-683 A). It reads as follows: "It is true that discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology used in relation to exercise of statutory discretion often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority.... In another, it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another." Lord Greene also observed: (KB p. 230 : All ER p. 683 F-G) "... it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body can come to. It is not what the court considers unreasonable.... The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another." (Emphasis supplied) 18. Therefore, to arrive at a decision on "reasonableness" the court has to find out if the administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four corners of the law, and not one which no sensible person could have reasonably arrived at, having regard to the above principles, and must have been a bona fide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the court to substitute its view.” W.A. 1364/2022 -:24:- (ix) In **Union of India v. Kuldeep Singh** [AIR 2004 SC 827], while testing the correctness of the judgment rendered under the Narcotic Drugs and Psychotropic Substances Act, 1985, and the discretion to be exercised by the High Court, the Hon'ble Supreme Court explained the principles governing the mode of exercise of the discretionary power for public functionaries as under: "20. When anything is left to any person, judge or Magistrate to be done according to his discretion, the law intends it must be done with sound discretion, and according to law. In its ordinary meaning, the word "discretion" signifies unrestrained exercise of choice or will; freedom to act according to one's own judgment; unrestrained exercise of will; the liberty or power of acting without control other than one's own judgment. But, when applied to public functionaries, it means a power or right conferred upon them by law, of acting officially in certain circumstances according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others. Discretion is to discern between right and wrong; and therefore, whoever has the power to act at discretion, is bound by the rule of reason and law. 21. Discretion, in general, is the discernment of what is right and proper. It denotes knowledge and prudence, that discernment which enables a person to judge critically of what is correct and proper united with caution; nice discernment, and judgment directed by circumspection; deliberate judgment; soundness of judgment; a science or understanding to discern between falsity and truth, between wrong and right, between shadow and substance, between equity and colourable glosses and pretences, and not to do according to the will and private affections of persons. 22. The word "discretion" standing single and unsupported by circumstances signifies exercise of judgment, skill or wisdom as distinguished from folly, unthinking or haste; evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. The word in itself implies vigilant circumspection and care; therefore, where the legislature concedes discretion it also imposes a heavy responsibility. "The discretion of a judge is the law of tyrants; it is always unknown. It is different in different men. It is casual, and depends upon W.A. 1364/2022 -:25:- constitution, temper and passion. In the best it is often times caprice; in the worst it is every vice, folly, and passion to which human nature is liable," said Lord Camden, L.C.J., in Hindson and Kersey (1680) 8 HOW St Tr. 57. 23. If a certain latitude or liberty is accorded by a statute or rules to a judge as distinguished from a ministerial or administrative official, in adjudicating on matters brought before him, it is judicial discretion. It limits and regulates the exercise of discretion, and prevents it from being wholly absolute, capricious, or exempt from review." (x) In **State of NCT of Delhi v. Sanjeev** , [AIR 2005 SC 2080], explaining the scope of judicial review of executive action, the Hon'ble Supreme Court held as under: "15. One of the points that falls for determination is the scope for judicial interference in matters of administrative decisions. Administrative action is stated to be referable to broad area of governmental activities in which the repositories of power may exercise every class of statutory function of executive, quasilegislative and quasi-judicial nature. It is trite law that exercise of power, whether legislative or administrative, will be set aside, if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary (see **State of U.P. v. Renusagar Power Co** .). At one time, the traditional view in England was that the executive was not answerable where its action was attributable to the exercise of prerogative power. Professor de Smith in his classical work Judicial Review of Administrative Action, 4[th] Edn. at pp. 285-87 states the legal position in his own terse language that the relevant principles formulated by the courts may be broadly summarised as follows: "The authority in which discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it; it must not act under the dictates of another body or disable itself from exercising discretion in each individual case. In the purported exercise of its discretion, it must not do what it has been forbidden to do, nor must it do what it has not been authorised to do. It must act in good faith, W.A. 1364/2022 -:26:- must have regard to all relevant considerations and must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. These several principles can conveniently be grouped in two main categories: (i) failure to exercise a discretion, and (ii) excess or abuse of discretionary power. The two classes are not, however, mutually exclusive. Thus, discretion may be improperly fettered because irrelevant considerations have been taken into account, and where an authority hands over its discretion to another body it acts ultra vires." (xi) While testing the validity of Central Electricity Regulatory Commission (Procedure, terms and conditions for grant of trading licence and other related matters) (Amendment) Regulations, 2006, the Hon'ble Supreme Court in **Global Energy Limited and Another v. Central Electricity Regulatory Commission** , [AIR 2009 SC 3194 : (2009) 15 SCC 570], started the judgment with an epilogue and it reads as under: “Epilogue 71. The law sometimes can be written in such subjective manner that it affects efficiency and transparent function of the Government. If the statute provides for pointless discretion to agency, it is in essence demolishing the accountability strand within the administrative process as the agency is not under obligation from an objective norm, which can enforce accountability in decision-making process. All law-making, be it in the context of delegated legislation or primary legislation, have to conform to the fundamental tenets of transparency and openness on one hand and responsiveness and accountability on the other. These are fundamental tenets flowing from due process requirement under Article 21, equal protection clause embodied in Article 14 and fundamental freedoms clause ingrained under Article 19. A modern deliberative democracy cannot function without these attributes.” 40. The power conferred on the authority without any guidelines may likely to be abused or arbitrarily exercised W.A. 1364/2022 -:27:- and in such circumstances, the guidance and control of exercise of such power has to be gathered from the object of conferment of power. Non-consideration or non-application of mind to relevant factors renders the exercise of discretion manifestly erroneous, and it is cause for judicial interference.” 30. Another aspect to be considered is that the Arbitrator (National Highways Act, 1956) & District Collector, Thrissur has passed an order/award dated 1.7.2019. Challenging the said order, W.P.(C) No.21796/2019 has been filed on 19.08.2022, after a year. Even taking it for granted that the 1[st] respondent approaches the District Court under Section 34 of the Arbitration and Conciliation Act, 1996, delay whether could be condoned, has to be seen in the light of the decisions of the Hon'ble Supreme Court in **Union of India** v. **Popular Construction Co.** , v. **Union** reported in (2001) 8 SCC 470, **Simplex Infrastructure Limited of India** reported in (2019) 2 SCC 455, and **Mahindra and Mahindra Financial Services Limited** v. **Maheshbhai Tinabhai Rathod and Others** reported in (2022) 4 SCC 162. 31. Though Mr. T. Rajasekharan Nair, learned counsel for the 1[st] respondent/writ petitioner, made submissions to sustain the impugned judgment, in the light of the statutory provisions and decisions considered, we reject the same. W.A. 1364/2022 -:28:- For the reasons stated supra, impugned judgment is set aside. Writ appeal is allowed. **Sd/S.MANIKUMAR CHIEF JUSTICE** krj **Sd/SHAJI P.CHALY JUDGE** //TRUE COPY// P.A. TO C.J.