National Highways Authority of India v/s Sayedabad Tea Company Ltd. & Ors.

The moot question which arises before us is whether the Act 1996(hereinafter being referred to as “Act 1996”) is Act 1956 which provides for appointment of an Arbitrator by the Central The relevant seminal facts are that the subject land comprised in “Sayedabad Tea Estate” situated at Mouza Purba Madati J.L. No. 108 Police Station Phansidewa Dist. Darjeeling measuring 5.08 acres was acquired by the appellant in exercise of its powers under Section 3(D) of the Act 1956 vide notification dated 22nd November 2005 under L.A.P. Case No. 4 2004­05 for the The Act 1956 is a comprehensive code in itself and a are several claimants over the amount deposited towards compensation determined by the competent authority in accordance with the mechanism provided under Section 3G of the Act 1956. If the amount so determined by the competent 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 under Section 3G(5) of the Act. While determining the amount of compensation under sub­section(1) or sub­section(5) it is the duty of the Arbitrator to take into consideration the relevant 1956. Where the amount determined by the Arbitrator is in excess of the amount determined by the competent authority under Section 3G of the Act 1956 the Arbitrator may at its discretion award interest at nine per cent per annum on the of taking possession under Section 3D till the date of actual Determination of amount payable as 1) … 2) … 3) … 4) … under sub­section or sub­section 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 6) Subject to the provisions of this Act the provisions of 7) The competent authority or the arbitrator while section as the case may be shall take into of publication of the notification under b) the damage if any sustained by the person interested at the time of taking c) the damage if any sustained by the person interested at the time of taking acquisition injuriously affecting his other immovable property in any manner or his earnings d) if in consequences of the acquisition of the land the person interested is compelled to change his residence or place of business the reasonable expenses if any incidental to such the competent authority the arbitrator may award amount from the date of taking possession under In the instant case the respondent­applicant being competent authority under sub­section(1) of Section 3G of the Act 1956 filed application for appointment of an Arbitrator in terms of Section 3G(5) to the Central Government on 8th December 2006. As alleged since the Central Government has terms of letter dated 8th December 2006 within a period of 30 days from receipt of the request application was filed on 7th of an Arbitrator invoking Section 11(6) of the Act 1996. It reveals that the Arbitrator was appointed by the Central Court of Calcutta and appointment of Arbitrator during the pendency of proceedings cannot be said to be a valid Immediately after passing of the order dated 6th July 2007 enactment laying down a procedure for appointment of an Central Government under Section 3G(5) of the Act 1956 the application made under Section 11(6) of the Act 1996 is not invoking review jurisdiction by the High Court as envisaged under Order 47 Rule 1 read with Section 114 of Code of Civil P.N. Sinha) who was appointed by the High Court of Calcutta pursuant to Order dated 6th July 2007 under Section 11 of the Act 1996 before initiation of the proceedings sent the letter of It is informed to this Court that the Arbitrator who was Act 1956 in April 2007 could not have proceeded after the intervention was made by the High Court of Calcutta in appointing the sole Arbitrator under Section 11(6) of the Act 1996. That for all practical purposes the dispute raised by the respondent­applicant aggrieved by the compensation awarded far not been adjudicated because of the competence of the to whether it would be under the Act 1956 or Act 1996 as 10. Mr. Vikas Goel learned counsel for the appellant submits determining compensation by the competent authority and any the Act 1956. But before the matter could be proceeded the respondent­applicant approached the High Court by filing an special law prevail over the general law the provisions of Act In support of his submission learned counsel for the appellant has placed reliance on the recent judgment of two Judges’ Bench of this Court in General Manager National Highways and Infrastructure Development in Civil Appeal No. 52518 decided on 16 th May 2018 and Orders passed by the High Court i.e. 6th July 2007 and 27th 12. Per contra Mr. Prashant Bhushan learned counsel for the respondents while supporting the order passed by the High whom application was filed for appointment of an Arbitrator under Section 3G(5) of Act 1956 has failed to discharge its obligations within 30 days of presentation of the application which indisputedly was December 2006 or until filing of the application for appointment of an Arbitrator to the Chief Justice his Designate under Section 11(6) of the Act 1996 i.e. 7 th March 2007 the respondent was justified in taking recourse to presentation of the application under the Act 1996 before the no legal impediment before the High Court of Calcutta in and in support of his submission placed reliance on the judgment of this Court in Deep Trading Company Vs. Indian 14. We have heard learned counsel for the parties and with 15. At the very outset we may notice that the two Judge Bench of this Court in the recent judgment in General Manager Highways and the scope of sub­sections and of Section 3G of the Act the Act 1956 being a special enactment and Section 3G in with the Central Government under Section 3G(5) of the Act 1956 for appointment of an Arbitrator and if the Central 16. We are in full agreement with the legal position stated by a two Judge Bench of this Court in General ManagerNational Highways and Infrastructure Development Corporation Ltd. case(supra) but like to add further that the the Seventh Schedule of the Constitution with the exclusive inbuilt mechanism not only in initiating acquisition until and its adjudication by the Arbitrator to be appointed by the Act 1956 after the land is acquired there shall be paid an of the competent authority under sub­sections or of Section 3G of the Act 1956 and any person who is aggrieved by application being filed by either of the parties has to be determined by the Arbitrator to be appointed by the Central 18. After analysing the scheme it can be assumed that the is further strengthened in view of Section 3J of the Act which eliminates the application of the Land Acquisition Act 1894 to out a self­contained 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 Section 3G(5) of Act 1956 and sub­sectionof Section 3G itself clarifies that subject to the provisions of the Act 1956 the to the extent where the Act 1956 is silent the Arbitrator may 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 20. The plea of the respondents that they have rightly taken Act 1956 clearly stipulates that the provisions of the Act 1996 intended to give overriding effect to the provisions of the Act conclusion is that the legislature in its wisdom intended to 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 of the Electricity Act 2003 in particular this Court in Gujarat Urja Vikash Nigam Ltd. Vs. Essar Power Limited override the general provision in Section 11 of the disputes between the licensee and generating companies. It is well settled that the special law overrides the general in our adjudicate arbitrate disputes between licensees and law. Hence generating companies and only Section 86(1)(f) shall 23. We are also of the considered opinion that in view of the the Act 1996 for appointment of an Arbitrator was not maintainable and provisions of the Act 1996 could not be 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 7th March 2007 the right of appointment of an Arbitrator by the Central Government stands forfeited and has 3G of Act 1956 for the Central Government to appoint an request being made by either of the party aggrieved it will be vested with the Central Government for appointment of an Section 11 of Act 1996 has no application. The judgment in Arbitrator under the special enactment as in the instant case under Act 1956 and secondly if one party fails to exercise its 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 under Section 11 of the Act 1996 in April 2007 could not to observe that there is no need to file any application by the and appoint an Arbitrator in terms of Section 3G(5) of the Act 1956 within a period of 30 days with prior intimation to the respondents. As the litigation has consumed a sufficient long time we consider it appropriate to further observe that the Arbitrator so appointed by the Central Government may no case later than six months after the respondent­applicant 26. The appeals accordingly succeed and are allowed. The orders passed by the High Court dated 6th July 2007 and 27th August 2007 are hereby set aside. The Arbitrator may be 27. Pending application(s) if any stand disposed of

Summary: When the special law sets out a self-contained code, the application of general law would impliedly be excluded. The relevant seminal facts are that the subject land comprised in “Sayedabad Tea Estate” situated at Mouza Purba Madati, J.L. No. 108, Police Station Phansidewa, Dist. Darjeeling measuring 5.08 acres was acquired by the appellant (National Highways Authority of India) in exercise of its powers under Section 3(D) of the Act 1956 vide notification dated 22nd  November, 2005 under L.A.P. Case No. 4/2004­05 for the purpose of construction of the highways.In the instant case, the respondent­applicant being dissatisfied with the award of compensation determined by the competent authority under sub­section(1) of Section 3G of the Act, 1956 filed application for appointment of an Arbitrator in terms of Section 3G(5) to the Central Government on 8th December, 2006. As alleged, since the Central Government has not responded to his request for appointment of an Arbitrator in terms of letter dated 8th December, 2006 within a period of 30 days from receipt of the request, application was filed on 7th March, 2007 to the Chief Justice/his designate for appointment of an Arbitrator invoking Section 11(6) of the Act, 1996. It reveals that the Arbitrator was appointed by the Central Government sometime in April 2007.The High Court of Calcutta taking note of the fact that the Arbitrator has been appointed by the Central Government under Section 3G(5) of the Act, 1956 after the respondent­applicant had moved an application to the Chief Justice/his Designate invoking its power under Section 11(6) of the Act, 1996 held that right of appointment of the Arbitrator by the Central Government stands forfeited as it failed to appoint the Arbitrator until filing of the application under Section 11(6) of the Act, 1996 before the High Court of Calcutta and appointment of Arbitrator during the pendency of proceedings, cannot be said to be a valid appointment and hence referred the matter to be placed before the Chief Justice for naming an Arbitrator vide its Order dated 6th July, 2007.Immediately after passing of the order dated 6th July, 2007, the appellant moved an application for review and it was brought to the notice of the High Court that the Act, 1956 being a special enactment laying down a procedure for appointment of an Arbitrator where the power is being exclusively vested with the Central Government under Section 3G(5) of the Act, 1956, the application made under Section 11(6) of the Act, 1996 is not maintainable but this was not considered to be a valid reason for invoking review jurisdiction by the High Court as envisaged under Order 47 Rule 1 read with Section 114 of Code of Civil Procedure and the review application was dismissed vide Order dated August 27, 2007.ISSUE BEFORE THE COURT: Whether the application under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable in view of Section 3G(5) of the National Highways Act, 1956 which provides for an arbitrator by the Central Government.RATIO OF THE COURT:Mr. Vikas Goel, learned counsel for the appellant submits that the Act 1956 being a special enactment is a code in itself provide not only the procedure of acquisition but also the mode of determining compensation by the competent authority and any person, if aggrieved by the compensation determined under sub­ sections(1) or (2) of Section 3G of Act 1956 can certainly move an application for appointment of an Arbitrator to which a Central Government is under obligation to appoint under Section 3G(5) of the Act 1956. But before the matter could be proceeded, the respondent­-applicant approached the High Court by filing an application under Section 11(6) of the Act 1996 which was not maintainable and this being the settled principles of law that the special law prevail over the general law, the provisions of Act 1996 could not have been invoked at least for the appointment of an Arbitrator in abrogating the power of the Central Government in appointing the Arbitrator as contemplated under Section 3G(5) of Act 1956 and this being an apparent error in law committed by the High Court needs to be interfered by this Court. He has placed reliance on the recent judgment of two Judges’ Bench of this Court in General Manager (Project), National Highways and Infrastructure Development Corporation Ltd. Vs. Prakash Chand Pradhan &amp; Ors. passed in Civil Appeal No. 5250 of 2018 decided on 16th May, 2018. Per contra, Mr. Prashant Bhushan, learned counsel for the respondents, while supporting the order passed by the High Court of Calcutta impugned in the instant proceedings submits that sub­section(6) of Section 3G clearly postulates that subject to the provisions of the Act 1956, the provisions of Act 1996 shall apply to every arbitration under the Act, 1956. If the authority to whom application was filed for appointment of an Arbitrator under Section 3G(5) of Act, 1956 has failed to discharge its obligations within 30 days of presentation of the application which indisputedly was December, 2006 or until filing of the application for appointment of an Arbitrator to the Chief Justice/his Designate under Section 11(6) of the Act, 1996 i.e. 7th March, 2007, the respondent was justified in taking recourse to sub­section(6) of Section 3G of Act, 1956 for appointment of an Arbitrator under Section 11(6) of Act, 1996 and has forfeited its right to appoint an Arbitrator after presentation of the application under the Act, 1996. Reliance was placed on Deep Trading Company Vs. Indian Oil Corporation and Others 2013(4) SCC 35.The Court observed that 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 sub­sections (5) and (6) of Section 3G of the Act 1956 with reference to Section 11 of the Act, 1996 has held that the Act of 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 Arbitrator.It is settled principles of law that when the special law sets out a self­contained 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 sub­section (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 sub­section (5) of Section 3G of Act 1956, Section 11 of the Act 1996 has no application. 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. In our considered view, the High Court of Calcutta was not holding its competence to appoint an Arbitrator invoking Section 11 of Act, 1996. 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. DECISION HELD BY COURT:It is indeed true that the Arbitrator who was appointed by the Central Government subsequent to the filing of an application under Section 11 of the Act 1996 in April, 2007 could not proceed after the Arbitrator was appointed pursuant to the Order impugned in the instant proceedings, who too has later recused and almost 12 years have rolled by now, we deem it appropriate to observe that there is no need to file any application by the respondent­applicant and the Central Government shall consider and appoint an Arbitrator in terms of Section 3G(5) of the Act 1956 within a period of 30 days with prior intimation to the respondents. As the litigation has consumed a sufficient long time, we consider it appropriate to further observe that the Arbitrator so appointed by the Central Government may adjudicate and decide the dispute within a reasonable time but in no case later than six months after the respondent­applicant record its presence in the proceedings.The appeals accordingly succeed and are allowed. The orders passed by the High Court dated 6th July, 2007 and 27th August, 2007 are hereby set aside. The Arbitrator may be appointed by the appellants in terms indicated above. No costs.