Case: NATIONAL HIGHWAYS AUTHORITY OF INDIA Vs. SAYEDABAD TEA COMPANY LTD.  AND ORS

of the parties, has to be determined by the Arbitrator to be appointed by the Central Government in terms of sub-section (5) of Section 3G of the Act, 1956. 18. After analysing the scheme, it can be assumed that the legislature intended the Act, 1956 to act as a complete code in itself for the purpose of acquisition until culmination including disbursement and for settlement of disputes and this conclusion is further strengthened in view of Section 3J of the Act which eliminates the application of the Land Acquisition Act, 1894, to an acquisition under the Act, 1956. 19. It is settled principles of law that when the special law sets out a self-contained code, the application of general law would impliedly be excluded. In the instant case, the scheme of Act, 1956 being a special law enacted for the purpose and for appointment of an arbitrator by the Central Government under Section 3G(5) of Act, 1956 and sub-section (6) of Section 3G itself clarifies that subject to the provisions of the Act 1956, the provisions of Act 1996 shall apply to every arbitration obviously to the extent where the Act 1956 is silent, the Arbitrator may take recourse in adjudicating the dispute invoking the provisions of Act, 1996 for the limited purpose. But so far as the appointment of an Arbitrator is concerned, the power being exclusively vested with the Central Government as envisaged under sub-section (5) of Section 3G of Act 1956, Section 11 of the Act 1996 has no application. 20. The plea of the respondents that they have rightly taken recourse in the facts and circumstances of Section 11 of the Act, 1996 cannot be accepted for the reason that Section 3G(6) of the Act, 1956 clearly stipulates that the provisions of the Act, 1996 will apply subject to the provisions of the Act, 1956. The usage of the expression subject to clearly indicates that the legislature intended to give overriding effect to the provisions of the Act, 1956 where it relates to the disputes pertaining to determination of the amount of compensation under the Act. The irresistible conclusion is that the legislature in its wisdom intended to abrogate the power for appointment of an Arbitrator under the provisions of the Act, 1996. 21. In our considered view, the High Court of Calcutta was not holding its competence to appoint an Arbitrator invoking Section 11 of Act, 1996. 22. This very question earlier arose before this Court whether the application under Section 11(6) of the Act 1996 is maintainable in view of statutory provisions of Electricity Act, 2003 adjudicating the dispute between the licencees and the generating companies of the special enactment and Section 86(1) of the Electricity Act, 2003 in particular, this Court in Gujarat Urja Vikash Nigam Ltd. Vs. Essar Power Limited 2008(4) SCC 755 in para 28 observed as under:- 28. Section 86(1)(f) is a special provision and hence will override the general provision in Section 11 of the Arbitration and Conciliation Act, 1996 for arbitration of disputes between the licensee and generating companies. It is well settled that the special law overrides the general law. Hence, in our opinion, Section 11 of the Arbitration and Conciliation Act, 1996 has no application to the question who can adjudicate/arbitrate disputes between licensees and generating companies, and only Section 86(1)(f) shall apply in such a situation. 23. We are also of the considered opinion that in view of the power being vested exclusively with the Central Government to appoint an Arbitrator under Section 3G(5) of the Act 1956, being a special enactment, the application filed under Section 11(6) of the Act 1996 for appointment of an Arbitrator was not maintainable and provisions of the Act, 1996 could not be invoked for the purpose. 24. The submission of learned counsel for the respondents that as the appellant failed to make an appointment of the Arbitrator pursuant to a letter dated 8 th December, 2006 in terms of Section 3G(5) of the Act, 1956 within a period of 30 days, the High Court of Calcutta alone was holding its competence to appoint an Arbitrator and application was submitted by the respondent- applicant on 7 th March, 2007 the right of appointment of an Arbitrator by the Central Government stands forfeited and has relied on the Judgment of this Court in Deep Trading Company case(supra) is of without substance for the reason that there is no statutory limitation provided under sub-section (5) of Section 3G of Act 1956 for the Central Government to appoint an Arbitrator but that may not give an unguided discretion to the authority and in the absence of any statutory limitation, it must be within the reasonable time and if the Central Government fails in discharge of its statutory duty in appointing an Arbitrator on a request being made by either of the party aggrieved, it will be open to the party to invoke either the writ jurisdiction of the High Court under Article 226 of the Constitution of India or the Civil Court for the purpose. But as long as the power is exclusively vested with the Central Government for appointment of an Arbitrator under Section 3G(5) of the Act 1956, the provision of Section 11 of Act 1996 has no application. The judgment in Deep Trading Company case(supra) on which learned counsel has placed reliance is of no assistance for the reason firstly that controversy there was not in reference to the appointment of an Arbitrator under the special enactment as in the instant case under Act 1956 and secondly, if one party fails to exercise its power of appointment in terms of Clause 29 of the agreement in vogue, the provisions of Act 1996 would apply and the question for consideration was whether the rights of the party stand forfeited to appoint an Arbitrator after the party has invoked Section 11(6) of the Act 1996 which, as already observed by us, is not the question for consideration in the instant case.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. At the very outset, we may notice that the two Judge Bench of this Court in the recent judgment in General Manager (Project), National Highways and Infrastructure Development Corporation Ltd. case(supra), while dealing with the scope of sub-sections (5) and (6) of Section 3G of the Act 1956 with reference to Section 11 of the Act, 1996 has held that the Act 1956 being a special enactment and Section 3G in particular provides an inbuilt mechanism for appointment of an Arbitrator by the Central Government. Hence Section 11 of the Act, 1996 has no application and the power is exclusively vested with the Central Government under Section 3G(5) of the Act, 1956 for appointment of an Arbitrator and if the Central Government does not appoint an Arbitrator within a reasonable time, it is open for the party to avail the remedy either by filing a writ petition under Article 226 of the Constitution of India or a suit for the purpose but the remedy of Section 11 of Act 1996 is not available for appointment of an Arbitrator16. We are in full agreement with the legal position stated by a two Judge Bench of this Court in General Manager (Project), National Highways and Infrastructure Development Corporation Ltd. case(supra) but like to add further that the Act, 1956 has been enacted under Entry 23 of the Union List of the Seventh Schedule of the Constitution with the exclusive power to legislate with respect to highways, which are declared to be national highways by or under law by the Parliament. It is a comprehensive code and a special enactment which provides an inbuilt mechanism not only in initiating acquisition until culmination of the proceedings in determining the compensation and its adjudication by the Arbitrator to be appointed by the Central Government and if still remain dissatisfied, by the Court of law18. After analysing the scheme, it can be assumed that the legislature intended the Act, 1956 to act as a complete code in itself for the purpose of acquisition until culmination including disbursement and for settlement of disputes and this conclusion is further strengthened in view of Section 3J of the Act which eliminates the application of the Land Acquisition Act, 1894, to an acquisition under the Act, 195619. It is settled principles of law that when the special law sets out a self-contained code, the application of general law would impliedly be excluded. In the instant case, the scheme of Act, 1956 being a special law enacted for the purpose and for appointment of an arbitrator by the Central Government under Section 3G(5) of Act, 1956 and sub-section (6) of Section 3G itself clarifies that subject to the provisions of the Act 1956, the provisions of Act 1996 shall apply to every arbitration obviously to the extent where the Act 1956 is silent, the Arbitrator may take recourse in adjudicating the dispute invoking the provisions of Act, 1996 for the limited purpose. But so far as the appointment of an Arbitrator is concerned, the power being exclusively vested with the Central Government as envisaged under sub-section (5) of Section 3G of Act 1956, Section 11 of the Act 1996 has no application20. The plea of the respondents that they have rightly taken recourse in the facts and circumstances of Section 11 of the Act, 1996 cannot be accepted for the reason that Section 3G(6) of the Act, 1956 clearly stipulates that the provisions of the Act, 1996 will apply subject to the provisions of the Act, 1956. The usage of the expression subject to clearly indicates that the legislature intended to give overriding effect to the provisions of the Act, 1956 where it relates to the disputes pertaining to determination of the amount of compensation under the Act. The irresistible conclusion is that the legislature in its wisdom intended to abrogate the power for appointment of an Arbitrator under the provisions of the Act, 199621. In our considered view, the High Court of Calcutta was not holding its competence to appoint an Arbitrator invoking Section 11 of Act, 199623. We are also of the considered opinion that in view of the power being vested exclusively with the Central Government to appoint an Arbitrator under Section 3G(5) of the Act 1956, being a special enactment, the application filed under Section 11(6) of the Act 1996 for appointment of an Arbitrator was not maintainable and provisions of the Act, 1996 could not be invoked for the purpose24. The submission of learned counsel for the respondents that as the appellant failed to make an appointment of the Arbitrator pursuant to a letter dated 8 th December, 2006 in terms of Section 3G(5) of the Act, 1956 within a period of 30 days, the High Court of Calcutta alone was holding its competence to appoint an Arbitrator and application was submitted by the respondent- applicant on 7 th March, 2007 the right of appointment of an Arbitrator by the Central Government stands forfeited and has relied on the Judgment of this Court in Deep Trading Company case(supra) is of without substance for the reason that there is no statutory limitation provided under sub-section (5) of Section 3G of Act 1956 for the Central Government to appoint an Arbitrator but that may not give an unguided discretion to the authority and in the absence of any statutory limitation, it must be within the reasonable time and if the Central Government fails in discharge of its statutory duty in appointing an Arbitrator on a request being made by either of the party aggrieved, it will be open to the party to invoke either the writ jurisdiction of the High Court under Article 226 of the Constitution of India or the Civil Court for the purpose. But as long as the power is exclusively vested with the Central Government for appointment of an Arbitrator under Section 3G(5) of the Act 1956, the provision of Section 11 of Act 1996 has no application. The judgment in Deep Trading Company case(supra) on which learned counsel has placed reliance is of no assistance for the reason firstly that controversy there was not in reference to the appointment of an Arbitrator under the special enactment as in the instant case under Act 1956 and secondly, if one party fails to exercise its power of appointment in terms of Clause 29 of the agreement in vogue, the provisions of Act 1996 would apply and the question for consideration was whether the rights of the party stand forfeited to appoint an Arbitrator after the party has invoked Section 11(6) of the Act 1996 which, as already observed by us, is not the question for consideration in the instant case.