S. 29A Arbitration Act Not Applicable to Arbitration Cases Commenced Before 2015 Amendment: Himachal Pradesh HC

Himachal Pradesh High Court stand Judge Jyotsna Rewal Prayer It confirmed that the provisions of Section 29A of the Act shall not apply to arbitration proceedings commenced before the coming into force of the Arbitration and Conciliation (Amendment) Act, 2015.

Quick Facts

The National Highway Authority of India (for short ‘NHAI’) feels aggrieved by the rejection of its applications under Section 34 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) by the learned District Judge on 04.12.2021, Mandi (HP), Law It has filed an application for these arbitration objections pursuant to Article 37 of .

All these objections arise from land acquisition by the appellant in Mohal Chamukha, Tehsil Sundernagar, District Mandi (HP).

The notification under Section 3A(1) of the National Highways Act, 1956 (‘NH Act’ for short) was published in the Official Gazette on 21.04.2012 for the acquisition of four lanes of land of NH21 (BilaspurNer Chowk Division). 2(iii). The notification under NH Act Section 3D(1) was published in the Official Gazette on 01.04.2013.

For the lands covered by the above notifications, the Competent Authority Land Acquisition (‘CALA’) announced the tender number 45/201314 on 31.10.2013. Under the award, the market value of the land was assessed at Rs 50,00,000 per bigha.

The land owners seeking increase in the market value of the acquired land filed their demand petitions before the Arbitrator notified under Section 3G(5) of the NH Act. The learned Arbitrator gave the award under Section 3G(5) of the NH Act on 28.11.2017. The petitions submitted by the land owners were accepted. The market value of the acquired land has been increased to Rs.68,16,513 per bigha.

Aggrieved by the increase in market value determined by the arbitrator, NHAI invoked Section 34 of the Act and filed applications before the learned District Judge, Mandi, challenging the awards made in favor of the landowners. All these applications made by NHAI under Article 34 of the Act were collected and rejected as per the joint decision given on 04.12.2021. That’s why these objections are being made.

Discussions

The appellant submitted He stated that the trial before the learned Arbitrator started on 06.02.2015 and the decision was given on 28.11.2017. Considering Article 29A of the Law that came into force on 23.10.2015, the decision had to be made within 12 months from the date of application. The decision given by the learned Arbitrator on 28.11.2017 is not valid since the Arbitrator took up official duties on that date.

The Sale deed relied upon by the learned Arbitrator regarding Mohal Thala was for a very small area as compared to the large tracts of land acquired under the questionable land acquisition process.

He learned that the Tribunal failed to appreciate the fact that, in increasing the market value, the Arbitrator mistakenly took into account the audit report prepared by a retired State Administrative Service Officer. The provisions of the Code of Civil Procedure do not apply to arbitration proceedings. For this reason, the report in question could not be examined.

On the contraryLearned counsel for the respondents defended the award passed by the learned Arbitrator as well as the order passed by the learned District Judge.

Analysis of the Court

The court initially referred to its own decision. Construction Company and Anr. etc. Shimla Municipal Corporation & Ors. (2017) It is hereby held that the provisions of Section 29A of the Act shall not apply to arbitration proceedings commenced before the coming into force of the Arbitration and Conciliation (Amendment) Act, 2015 (3/2016).

While applying the above reasoning to the facts of the present case, the Court observed that the trial commenced on 06.02.2015 before the learned Arbitrator but Section 29A of the Act came into force from 23.10.2015, therefore, the learned District Judge did not err. holding that the decision given in the present case cannot be regarded as improper.

The court also referred to the decision of the Supreme Court. Spl. Land Acquisition Officer & Anr. MK vs Rafiq Saheb (2011) It was here acknowledged that there is no absolute rule that instances of sale of smaller pieces of land cannot be taken into account when a large piece of land is purchased. In some scenarios, such sale deeds of smaller plots of land can be used to determine the value of purchased plots of relatively large land area.

Based on the above, the court observed that in the present case, as observed by the learned District Judge, the Arbitrator took into account the sale deed to determine the market value as it was the only evidence of the purchase rate. existing land before that. However, the sale deed was dated 2008, whereas the notifications in the current case were made in 2012. The Learned Arbitrator rightly increased the value by 10%. It cannot be said that this increase is excessive.

The court referred to the 13th decision of the Supreme Court when considering the objection regarding the cuts. trowel etc. and Punjab Province and Ors.(2023) Here, when determining the development expense deduction, the Court takes into account the nature of the land, the area acquired, whether it is zoned or not, if so, to what extent, the purpose of acquisition, etc. It was concluded that it should be taken into consideration. The percentage of deduction or the size of the area to be set aside depends on the size, shape, condition, user, etc. of the land acquired. must be taken into account and evaluated by the Courts.

While applying the above considerations to the present case, the Court observed that neither reliance on the sale deed nor 10% increase in value or 33% deduction could be faulted in determining the market value of the acquired land.

The Court also rejected the arguments regarding the consideration of the Local Commissioner’s report and observed that Article 26 of the Arbitration Act provides that, unless otherwise agreed by the parties, the Arbitral Tribunal may appoint one or more experts to report to it on a particular matter. The issue will be determined by the court. The arbitral tribunal has the authority to appoint experts.

Based on the above, the court agreed with the findings of the learned District Judge that the contention that the Arbitrator cannot appoint an expert or take into account the report of an expert is not tenable.

The Court also rejected the contention that the appropriate parameters laid down under section 3G(7) were not followed and observed that under this section, the Arbitrator was required to determine the market value of the land on the date of publication of the notification under Section 3A of the Agreement. To behave. Damage to land/person/property and change of residence etc. Reasonable costs will also be taken into account.

Based on the above, the court noted that it was the stand of both the parties before the learned Arbitrator that the conversion rate is not relevant in determining the market value. The arbitrator had considered the sale deed of the land belonging to Mohal Thala, which is considered to be adjacent to Mohal Chamukha. The learned Arbitrator had allowed 10 per cent increase in value to bridge the gap of five years.

The court also noted that the Arbitrator took into account the potential of the land and increased the value by considering the proximity to the road and other developed areas. This was right. It cannot be said that a 10 percent increase in value is excessive. The learned Arbitrator had also allowed deduction of 33% on account of development expenses, therefore the prescribed parameters were duly considered by the Arbitrator.

The Court concluded that no case has been made to interfere with the impugned order dated 04.12.2021 and dismissed the applications filed by the appellant under Section 34 of the Act and the order passed by the learned Arbitrator was upheld. Accordingly, all these objections made pursuant to Article 37 of the Law were rejected.

Case Title: National Highway Authority of India vs Rishi Singh & Ors

Quote: 2024 LiveLaw (HP) 70

Case Reference: Arbitration Appeal No. 53 of 2024 and Arbitration Appeal No. 62 and 78 of 2024

Decision Date: 05/11/2024

Click Here to Read/Download the Order

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