Heard Shri Ravindra Narayan Singh, learned counsel for the applicant and Ms. Samidha, learned counsel for the opposite parties.
This is an application under Section 11(4) and (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ''the Act, 1996') for appointment of an Arbitrator.
Shri Ravindra Narayan Singh, learned counsel appearing for the applicant invited the attention of the Court to the provision contained in Section 3G(5) of the National Highways Act, 1956 (hereinafter referred to as ''the Act, 1956') to contend that the Arbitrator in the instant case in the context of non acceptance of the amount determined by the competent authority under Sub-section (1) or Sub-section (2) of Section 3-G is to be appointed by the Central Government and though there is no agreement in this regard, but, statutory provision is there. Furthermore, he invited the attention of the Court to Sub-section 6 of Section 3-G to submit that the provisions of the Act, 1996 shall apply to every Arbitration under this Act. He then invited the attention of the Court to a notice dated 11.05.2017 sent by the applicant to the Special Land Acquisition Officer, which he says, is a notice for referring the matter to Arbitration. It is his submission, as no Arbitrator has been appointed by the Central Government, therefore, this Court has authority under Section 11(4) and (6) of the Act, 1996 to appoint the Arbitrator.
Ms. Samidha, learned counsel appearing for the National Highway Authority however submits that the Central Government has already appointed the District Collector, Raebareli as Arbitrator under Section 3-G(5) and also that while proceeding to act as Arbitrator Sub-section 6 and 7 of Section 3-G will have to be kept in mind by him, therefore, she says that this application is not maintainable before this Court in view of a recent decision of the Supreme Court dated 16.05.2018 passed in Civil Appeal No. 5250 of 2018; General Manager (Project) National Highway and Infrastructure Development Corporation Ltd. Vs. Prakash Chand Pradhan and Ors.
Having heard learned counsel for the parties and having perused the records, the Court finds that there is no agreement between the parties but there is a statutory provision contained in Section 3-G Sub-section 5, which reads as under:-
"(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 the appointed by the Central Government."
As per the aforesaid provision the appointment of the Arbitrator is to be made, if, the amount determined by the ''competent authority', as defined in Section 3(a) of the Act, 1956 under Sub-section 1 or Sub-section 2 of Section 3-G, is not acceptable to either of the parties i.e. either the National Highway Authority or the owner of the land. Secondly, such Arbitrator is to be appointed by the Central Government. By virtue of Sub-section 6 of Section 3-G of the Act, 1956 the provisions of the Arbitration and Conciliation Act, 1996 are applicable to every Arbitration under the said Act ''subject to the provisions of this Act' i.e. the Act of 1956, which would include Sub-section 5 of Section 3-G, therefore, the contention of Shri Singh, learned counsel appearing for the applicant that an application under Section 11 of the Act, 1996 would lie, firstly, because the Central Government failed to appoint an Arbitrator and secondly, because of the amendment of 2016 by which certain changes have been made in Section 12(5) of the Act, 1996, can not be accepted as the application of the Act, 1996 is subject to the provisions of the Act, 1956 which includes Sub-section 5 of Section 3-G under which there is a statutory provision to the effect that the Arbitrator shall be appointed by the Central Government. The vires of the said provision can not be challenged in proceedings under Section 11 nor have they been challenged in any other proceedings by the applicant. Furthermore, the Notification dated 05.09.2014 can also not be challenged in these proceedings under Section 11, therefore, the contention of Shri Singh that this notification is in the teeth of the amendment of 2016, apart from the fact that it appears to be untenable in view of Sub-section 6 of Section 3-G, it, even otherwise, can not be considered in these proceedings under Section 11.
Most importantly the Supreme Court in a recent decision rendered in the case of General Manager (Project) National Highway and Infrastructure Development Corporation Ltd. (supra) has considered the provision of Section 3-G of the Act 1956 and held as under:-
"Having heard learned counsel for the parties, we are, therefore, of the view that a Section 11 application under the 1996 Act cannot be made as the Central Government alone is to determine who is to be an arbitrator under Section 3-G (5) of the National Highways Act. If a demand is made for the appointment of an arbitrator, and the Central Government does not appoint an arbitrator within a reasonable time, the remedy that is to be availed of is a writ petition or a suit for the said purpose, and not Section 11 of the Arbitration and Conciliation Act, 1996.
A similar provision contained in Section 86 (1)(f) of the Electricity Act, 2003 specifically gives the State Commission power to refer any dispute for arbitration. In this view of the matter, this Court in Gujarat Urja Vikas Nigam Ltd. vs. Essar Power Ltd., (2008) 4 SCC 755, held 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 3 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."
We respectfully agree with the ratio of the said judgment. Likewise, Section 3-G of the National Highways Act is a special provision which will be given effect insofar as the appointment of an arbitrator is concerned.
Learned counsel appearing on behalf of the respondents has, however, argued that an arbitrator has now been appointed under Section 11 of the Arbitration and Conciliation Act, 1996 and, that, therefore, no prejudice will be caused if he is allowed to continue. This arguments ignores the fact that Section 11 of the Arbitration and Conciliation Act does not apply and that, under Section 3-G, the Central Government alone can appoint an arbitrator.
Accordingly, the impugned judgment is set aside and the appeals are allowed."
This Court is of the view that once by the Notification dated 05.09.2014 the Central Government has appointed the District Collector, Raebareli as Arbitrator under Section 3-G(5) in respect of matters referred in the said provision, an application under Section 11 of the 1996 would not be maintainable.
Furthermore, there is another aspect of the matter. On a perusal of the notice dated 11.05.2017 sent by the applicant to the Special Land Acquisition Officer (joint Organization), who, according to the applicant, is the competent authority under Section 3(a) of the Act, 1956, for the purposes of the said Act, there is an acceptance of amount of compensation as determined by the competent authority without prejudice to the applicant's legal rights and reserving its rights to challenge the same before the appropriate authority, therefore, stricto sensuo this can not be treated as an application referred in Section 3-G(5) requiring reference for Arbitration before the District Collector, Raebareli. Nevertheless, it is always open for the applicant to move appropriate application as contemplated in Section 3-G(5) before the competent authority declining to accept the amount as determined by him under Sub-section (1) and Sub-section (2) of Section 3-G, whereupon he shall refer the matter to Arbitration before the Collector in terms of the said provision read with the notification dated 05.09.2014, if there is no other legal impediment in this regard.
At this stage Ms. Samidha informed that applications are also submitted directly before the Arbitrator i.e. the Collector. If it is so and in practice the applications are submitted before the Arbitrator i.e. the Collector by either of the parties then the applicant may straightway move the Collector, Raebareli under Section 3-G(5), who shall obviously proceed to act as Arbitrator in accordance with the Act, 1956 as discussed hereinabove.
With the aforesaid observations, the application is disposed of.