In the case of Smt. Tulsarani And Another v. Union of India And 3 Others [MATTERS UNDER ARTICLE 227 No.56 of 2022] according to the Allahabad High Court, the Commercial Courts lack the authority to entertain applications made according to Section 34 of the 2013 Arbitration and Conciliation Act that contest the amount of damages granted under the 1956 National Highways Act. However, the Justice J. J. Munir bench made it clear that a challenge to a Statutory Arbitrator’s decision made pursuant to Section 3G(5) of the National Highways Act of 1956 may be made by filing an application pursuant to Section 34 of the Arbitration and Conciliation Act in the proper court. To put it another way, the Court noted that a party who feels wronged by the decision or award of the Statutory Arbitrator appointed under Section 3G(5) of the 1956 Act with regard to land acquired under the National Highways Act, 1956, may file a claim under Section 34 of the Arbitration and Conciliation Act before the appropriate forum, but not before the Commercial Courts because the matter isn’t a commercial one. In court, attorneys Pranjal Mehrotra and Nand Kishor Mishra represented the petitioners and the National Highway Authority of India, respectively.
Facts: In August 2017, the Central Government purchased a parcel of the petitioners’ land for the purpose of expanding a National Highway. The relevant authority issued an award in July 2018 3 assessing compensation for the entire acquired parcel of land (including the land of the petitioners) on the grounds that it is agricultural land. Unhappy with the decision made, the petitioners approached the Statutory Arbitrator, who had been selected by the Central Government in accordance with Section 3G(5) of the Act of 1956, asking for an increase in the compensation granted. The Statutory Arbitrator, however, upheld the relevant authority’s decision. As a result of their displeasure with the Statutory Arbitrator’s decision, the petitioners filed a petition with the Commercial Court in Jhansi pursuant to Section 34 of the Arbitration and Conciliation Act, 1996, asking the court to annul the Statutory Arbitrator’s decision. However, the Commercial Court in Jhansi ruled that the Statutory Arbitrator’s decision could not be contested under Section 34 of the Act and that the petitioners’ only option was to request a referral to the Land Acquisition and Rehabilitation and Resettlement Authority under Section 67 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. In light of this, the Presiding Officer of the Commercial Court in Jhansi issued an order directing the return of the Section 34 applications under Order VII Rule 10 CPC for presentation to the appropriate Court. This directive comes from the Commercial Court’s presiding officer. In this particular case, Jhansi was contested.
Judgement: However, the Court decided that the award of the Statutory Arbitrator under Section 3G(5) of the National Highways Act 1956 can very well be contested by an application under Section 34 of the Act, despite the fact that it is correct that a commercial court cannot hear such a plea. “Nothing in the design of Section 36 of the Act of 1956 prevents the application of Section 34 to the Statutory Arbitrator’s decision made in accordance with Section 3G(5) of the Act of 1956. In accordance with Section 34 of the Act of 1996, an award made by the Statutory Arbitrator may be contested before a court with appropriate authority “The Commercial Court in Jhansi had a different opinion, which was noted by the court. The Commercial Court provided the following clarification with regard to its opinion that the petitioners should request a referral to the Land Acquisition and Rehabilitation and Resettlement Authority under the RFCTLARR Act, 2013: “The Act of 2013’s provisions have only been made partially applicable to acquisitions made under the Act of 1956, in order to determine compensation and entitlement to solatium, interest, etc. The limited extension of some benefits under the Act of 2013 to acquisitions made under the Act of 1956 aims to bring land oustees covered by both statutes into parity and demonstrate that the entire procedure, including remedies for determining and challenging the amount of compensation awarded under the Act of 1956, have not been absorbed by the Act of 2013. In light of this, the Court determined that a land oustee whose land was acquired under the Act of 1956 does not have access to the provisions of Section 3G of that Act that refer him to the Land Acquisition, Rehabilitation and Resettlement Authority for the purpose of seeking an increase in the compensation already granted to him. The Court cited the Supreme Court’s decision in the matter of Union of India and another v. Tarsem Singh and others, (2019) 9 SCC 304, in this regard. Regarding the query of which forum the petitioners should approach, the Court made it clear that, upon return of the application under Section 34 of the Act of 1996, they would be free to institute proceedings, if so advised, before the Court of competent jurisdiction, entitled to hear an application under Section 34 of the Act of 1996, subject, of course, to the law of limitations. The Court made it clear that the application under Section 34 of the Act of 1996 would not be maintainable before the Commercial Court because the petitioner’s land was acquired for the purpose of a National Highway and was not, therefore, a “commercial dispute” as defined by Section 2(1)(c) of the Commercial Courts Act, 2015. The plea was so thrown out.
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JUDGEMENT REVIEWED BY SNIGDHA DUBEY