Rajamma v. Project Director, National Highways Authority of India (NH A1) and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **WEDNESDAY, THE 4TH DAY OF OCTOBER 2017/12TH ASWINA, 1939** **WP(C).No. 11645 of 2017 (E)** **----------------------------** **PETITIONER:** ## **----------** **RAJAMMA, W/O.RAMAKRISHNA CHETIYAR, AGED 68, CHIRAKODATH PARAMBIL THOTTAKATTUKARA.P.O., ALUVA** **BY ADVS.SRI.V.A.VINOD SRI.RAHUL VARGHESE, AMICUS CURIAE B/O** **RESPONDENT(S):** **--------------** **1. PROJECT DIRECTOR, NH.A1, THUSHARABINDU NO.33-7, CHANDRA NAGAR EXTENSION, NARIKODE PALAKKAD-678001** **2. DEPUTY COLLECTOR,** **SLAO & COMPETENT AUTHORITY, NHDP, THRISSUR-680001** **3. DISTRICT COLLECTOR, CIVIL STATION KAKKANAD, ERNAKULAM-682031** **R1 BY ADV. SRI.THOMAS ANTONY** **R2,R3 BY GOVERNMENT PLEADER SRI SANTHOSH PETER ADV.SRI RAHUL VARGHESE AMICUS CURIAE** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-08-2017, THE COURT ON 04.10.2017 DELIVERED THE FOLLOWING:** **K.V.** **WP(C).No. 11645 of 2017 (E)** **----------------------------** ## **APPENDIX** **PETITIONER(S)' EXHIBITS** **-----------------------** **EXHIBIT P1 TRUE COPY OF THE AWARD IN OP(ARBITRATION) NO.131/2012 OF ADDITIONAL DISTRICT COURT 1, N PARAVOOR. EXHIBIT P2 TRUE COPY OF THE REPRESENTATION DATED 15.4.2016** **RESPONDENT(S)' EXHIBITS NIL** **-----------------------** **K.V. P.S.TO JUDGE** **C.R.** ## **P.B.SURESH KUMAR, J.** **--------------------------------------------** **W.P.(C).No.11645 of 2017** **------------------------------------------------------Dated this the 4[th] day of October, 2017** ## **J U D G M E N T** 0.303 hectares of property belonged to the petitioner has been acquired for widening the National Highway 47 in accordance with the provisions contained in the National Highways Act, 1956 (the Highways Act). As the compensation granted to the petitioner by the competent authority under the Highways Act for the land acquired was not acceptable to the petitioner, she preferred an application before the third respondent for determination of the compensation by recourse to the arbitration proceedings provided for under sub-section (5) W.P.(c).No.11645 of 2017 : 2 : of Section 3G of the Highways Act. Pursuant to the said application, an award has been passed by the third respondent determining the compensation payable to the petitioner. Though the amount of compensation determined as payable to the petitioner by the competent authority under the Highways Act was enhanced by 30% in terms of the award passed by the third respondent, the said compensation was also not acceptable to the petitioner. The petitioner, therefore, challenged the award passed by the third respondent invoking Section 34 of the Arbitration and Conciliation Act, 1996 (the Act) before the court exercising the power under that section. The court found that the compensation granted to the petitioner was less than the compensation granted in respect of similarly placed properties acquired earlier for the very same purpose invoking the provisions contained in the Land Acquisition Act, 1894 and therefore, the impugned award is opposed to Public Policy. It was also found by the court that the impugned award is vitiated on account of non compliance of the principles of natural justice. On the aforesaid grounds, W.P.(c).No.11645 of 2017 : 3 : the court set aside the award invoking its power under Section 34(2)(b)(ii) of the Act. Ext.P1 is the order passed by the court in this connection. In the light of Ext.P1 order, the petitioner preferred Ext.P2 representation before the third respondent to initiate arbitration proceedings afresh for determination of the compensation payable to her. The grievance voiced by the petitioner in the writ petition concerns the inaction on the part of the third respondent in initiating fresh proceedings for determination of the compensation payable to her. 2. Heard the learned counsel for the petitioner, the learned Government Pleader, the learned Standing Counsel for the National Highway Authority of India as also Adv.Rahul Varghese, the learned Amicus Curiae appointed in the matter. 3. The learned counsel for the petitioner submitted that in so far as the award passed by the third respondent under sub-section (5) of Section 3G of the Highways Act has been set aside by the court, otherwise than on merits, the third respondent is bound to commence W.P.(c).No.11645 of 2017 : 4 : the arbitration proceedings afresh and pass an award determining the compensation payable to the petitioner. 4. The learned Standing Counsel for the National Highway Authority of India, however, pointed out that Ext.P1 order passed by the court cannot be understood as one remitting the matter to the Arbitrator for fresh proceedings for, the court exercising the power under Section 34 of the Act cannot remit a matter for fresh proceedings by the Arbitrator. As such, according to the learned Standing Counsel, the third respondent is not bound to initiate proceedings for determining the compensation payable to the petitioner merely by reason of Ext.P1 order. It is pointed out by the learned Standing Counsel that in a case of this nature, the remedy of the petitioner is to move the Central Government for appropriate directions to the third respondent to initiate fresh proceedings for determination of the compensation payable to her. 5. The learned Amicus Curiae pointed out that the learned Standing Counsel for the National Highway Authority of India is right in his submission that the court W.P.(c).No.11645 of 2017 : 5 : exercising power under Section 34 of the Act cannot remit an award under the Act and the said position has been made clear by the Apex Court in **Kinnari Mullick vs. Ghanshyam Das Damini** [AIR 2017 SC 2785]. It was, however, pointed out by the learned Amicus Curiae that if an arbitral award is set aside without adjudication on merits, the parties are entitled to begin the arbitration afresh. He relied on paragraph 52 of the decision of the Apex Court in **McDermott International Inc. v. Burn Standard Co. Ltd.,** [(2006) 11 SCC 181)] and the decision of the High Court of Bombay in **Associated Constructions v. Mormugoa Port Trust** [2010(5) Bombay CR 100] in support of the said proposition. According to the learned Amicus Curiae, in so far as Section 11 of the Act does not apply to the statutory arbitration provided for under the Highways Act, the petitioner is certainly justified in approaching this Court for a direction to the third respondent, who is the Arbitrator appointed by the Central Government in this regard, for commencement of arbitration proceedings afresh. W.P.(c).No.11645 of 2017 : 6 : 6. It is seen that in **Kinnari Mullick** _(supra),_ the Apex Court considered the question whether the court exercising the power under Section 34 of the Act can relegate parties to the Arbitral Tribunal after having set aside the award. It was held in the said case that the court cannot remit an award and that it can only defer proceedings for a period of time, that too, upon a written request by one of the parties under Section 34(4) in order to give the Arbitral Tribunal an opportunity to eliminate the grounds for setting aside the award. In the light of the said judgment, the submission made by the learned Standing Counsel for the National Highway Authority of India that Ext.P1 order cannot be understood as an order remitting the matter for fresh consideration by the Arbitrator, has to be accepted. 7. But, the fact remains that the grievance of the petitioner as regards the compensation granted to her by the competent authority under the Highways Act has not been redressed by Ext.P1 order. That apart, by reason of the said order, she is deprived even the benefit of the W.P.(c).No.11645 of 2017 : 7 : enhancement granted by the third respondent, the Arbitrator. The question, therefore, is as to the remedy of persons like the petitioner in a case of this nature. In **Mc Dermott International Inc.** _(supra),_ it was held by the Apex Court that the Act contemplates intervention of the court only in the circumstances specified under Section 34 of the Act for the purpose of ensuring fairness in the proceedings and therefore, if the court exercising power under Section 34 of the Act finds that the award is vitiated on account of inherent infirmities as provided for under that section, the court can only quash the award leaving the parties free to begin the arbitration again, if it is desired. Paragraph 52 of the judgment in the said case reads thus: **“52.** The 1996 Act makes provision for the supervisory role of courts, for the review of the arbitral award only to ensure fairness. Intervention of the court is envisaged in few circumstances only, like, in case of fraud or bias by the arbitrators, violation of natural justice, etc. The court cannot correct errors of the arbitrators. It can only quash the award leaving the parties free to begin the arbitration again if it is desired. So, the scheme of the provision aims at keeping the supervisory role of the court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the court’s jurisdiction by opting for arbitration as they prefer the expediency and finality offered by it.” W.P.(c).No.11645 of 2017 : 8 : In **Associated Constructions** _(supra),_ the High Court of Bombay has clarified, following the decision of the Apex Court in **Mc Dermott International Inc.** _(supra),_ that in the event an award being set aside for reasons other than on merits, the parties are entitled to begin the arbitration again. Paragraph 14 of the said judgment reads thus: “14.The judgments support the submission on behalf of the Applicant that a fresh arbitration is permissible at least in the event of an award being set aside for reasons other than on merits. In the present case the entire award except as to one claim, was set aside for reasons other than on merits. This is clear from the fact that although the award in respect of only three items/claims was set aside, the entire award was set aside. The claims, other than those referred to in the judgment, were not considered or even referred to. In any event, as noted earlier, at least the claim in respect of a sum of Rs.1,50,000/- was set aside, not on merits but on the ground that no reasons were furnished. This was obviously in view of the Judgments which held that under the 1996 Act an award cannot be segregated and therefore even if a part thereof is liable to be set aside the entire award must be set aside. The Applicants are therefore entitled to begin the arbitration again.” The arbitration provided for under sub section (5) of Section 3G of the Highways Act being a statutory arbitration, Section 11 of the Act does not apply to such arbitrations. Since Section 11 of the Act does not apply to the arbitration W.P.(c).No.11645 of 2017 : 9 : provided for under sub section (5) of Section 3G of the Highways Act, in a case of this nature, it has to be held that the party concerned is entitled to make a request to the statutory arbitrator to begin the arbitration afresh and if such request is not considered, he/she is entitled to approach this Court under Article 226 of the Constitution, as otherwise, the statutory remedy provided to him/her for redressal of grievance concerning the compensation determined by the competent authority under the Highways Act would become otiose. It is all the more so since the right to property is a constitutional right guaranteed under Article 300A and the constitutional remedy under Article 226 is a remedy intended for advancing the cause of justice and not for defeating the same. The Central Government has no role in this matter as the role of the Central Government under the Highways Act is only to appoint Arbitrators for adjudication of the disputes contemplated under sub-section (5) of Section 3G of the Act. In the said view of the matter, the petitioner is entitled to succeed. In the result, the writ petition is allowed and the W.P.(c).No.11645 of 2017 : 10 : third respondent is directed to initiate proceedings afresh as provided for under sub-section (5) of Section 3G of the Highways Act for determination of the compensation payable to the petitioner for the property acquired from her as referred to in Ext.P1 order. The meticulous manner in which the learned Amicus Curiae, a Junior member the Bar prepared the matter and assisted the court, is appreciated and placed on record. Sd/ **P.B.SURESH KUMAR JUDGE** rsr