Gujarat High Court
Vijaybhai Bhailalbhai Patel vs Union Of India on 8 December, 2023
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/SCA/17199/2023 ORDER DATED: 08/12/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 17199 of 2023
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VIJAYBHAI BHAILALBHAI PATEL
Versus
UNION OF INDIA
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Appearance:
MR SAURABH G AMIN(2168) for the Petitioner(s) No.
1,10,11,12,13,14,15,16,17,18,19,2,20,21,22,23,24,25,26,27,28,29,3,30,31,32,
33,34,35,4,5,6,7,8,9
for the Respondent(s) No. 1,2,3,4,5
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
Date : 08/12/2023
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. By means of the present petition, the petitioners seek to challenge the vires of various provisions of the Railways Act, 1989, which pertain to determination of compensation; criteria for determination, market value of the land and interest on the excess amount of compensation determined by the Arbitrator. Section 20N of the Railways Act, 1989, whereby the provisions of the Land Acquisition Act, 1894 are excluded, is also subject matter of the Page 1 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined challenge herein.
2. One of the main prayer made in the writ petition is to challenge the notification dated 21.06.2010 issued by the Central Government, Ministry Railways appointing the respondent Nos. 2 to 5, officers working in the State of Gujarat, as Arbitrator to adjudicate the disputes pertaining to the determination of compensation under Section 20F(2) by the competent authority. The prayer is to declare appointment of respondent Nos. 2 to 5 as Arbitrators being illegal and to hold that they are not competent or qualified for appointment of Arbitrator and further declare the competent Civil Court having territorial jurisdiction over the acquired land to decide applications / references for enhancement of compensation of the acquired land; the proceedings in the arbitration applications pending since 2013 be forwarded to the competent Civil Court. Further prayer is to prohibit the respondent Arbitrator to proceed in the pending application filed in the year 2013 under Section 20F(6) of the Railways Act, 1989.
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3. In essence, the petitioners herein are challenging the provisions pertaining to reference of the dispute about the amount determined by the competent authority, to the Arbitrator in accordance with Section 20F(6) of the Railways Act, 1989, and would submit that the appointment of Arbitrator by the Central Government under the said provisions to decide the dispute, is liable to be set aside.
4. When the matter was taken up, the Court has raised a specific query to the learned counsel for the petitioners to answer the question of delay noticing that the present writ petition challenging the appointment of Arbitrator vide notification dated 21.06.2010 has been filed in the month of September, 2023. We may further note that the acquisition of the land-in-question in accordance with the provisions of the Railways Act, 1989 was made vide notification dated 29.09.2008 under Section 20A and the declaration notification dated 15.09.2009 under Section 20E of the Railways Act. The acquisition was for the purpose of execution, maintenance, management and operation of the Page 3 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined special railway project known as Western Dedicated Fright Corridor in the district Vadodara.
5. The award dated 13.04.2010 was passed by the competent authority determining the market value of the land, which was disputed by the petitioners on the ground that the market value determined by the competent authority was at illusory rates based on the jantri rates of the agricultural land prescribed by the State Government. The market value of the land-in-question noticing the intended land use (commercial) has been ignored. Further, no interest has been provided from the date of notification under Section 20A to the date of award.
6. It may be noted that on the reference made by the petitioners seeking enhancement of compensation, the matter was referred to the Arbitrator and the Arbitration Application Nos. 375 of 2013 to 437 of 2013 and 951 of 2013 (in all 64 cases) had been registered. After a period of 13 years, from the date of registration of the arbitration application, the Page 4 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined petitioners herein are raising a dispute with regard to the appointment of Arbitrator by the Central Government vide notification dated 21.06.2010, on the premise that the respondents - Arbitrators were unilaterally appointed by the Central Government which itself is a party to the dispute being the acquiring body. The Arbitrators being government officials cannot be said to be neutral persons. They have no knowledge or experience of law to adjudicate the matter pertaining to the determination of compensation. The determination of compensation is a judicial function with respect to which the Arbitrators appointed under Section 20F are incompetent.
7. Lastly, it is submitted that delay of merely 13 years in not adjudicating the disputes raised by the petitioners by the Arbitrator is against the mandate of the Arbitration Act' 1996 which provides period of 12 months for completion of proceedings by the Arbitral Tribunal.
8. All other prayers made in the writ petition as noted Page 5 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined hereinabove are pertaining to the provisions for determination of market value and the payment of interest etc. thereon. However, noticeable is the fact that the challenge to the provisions of Railways Act specifically the provisions under Section 20F(6) and 20F(7) of the Railways Act, 1989 along with the notification dated 21.06.2010 has been made after a period of 13 years from the date of declaration of the award and appointment of Arbitrator.
9. As the question raised is about the validity of the provisions pertaining to the appointment of Arbitrators which was made in the year 2010, we are of the considered view that the petitioners cannot be permitted to raise this challenge after a period of 13 years, on the premise that the Arbitrators appointed by the Central Government did not decide the dispute in a time bound manner. For the laches and delay in approaching this Court, raising the issue with regard to the manner of appointment of Arbitrators by the Central Government vide notification dated 21.06.2010, no good ground has been made out.
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10. So far as the delay in making the award by the Arbitrator from the averments made in the writ petition, it may be noted that some dispute was initially raised with regard to demand of arbitration fee, 50% of which was supposed to be paid by the landowners. On a challenge by some of the landowners in Special Civil Application No. 8140 to 8162 of 2013, this High Court has passed a common order dated 08.05.2013 observing that the Arbitrator and Revenue Inquiry Commissioner shall proceed with the arbitration proceedings irrespective of any obligation for the payment by the petitioners and that the Government of India, Ministry of Railways shall make provisions regarding the administrative and other expenses of Arbitrator, without any delay, so that the proceedings for the purpose of compensation of the claimants are not delayed. A copy of the order dated 08.05.2013 passed by this Court as noted hereinabove is appended as Annexure 'O' (page '139' of the paper-book).
11. A perusal of the order dated 08.05.2013 passed by Page 7 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined this Court indicates that prayer was made therein to issue directions to the Arbitrators to hear Section 7 applications for determination the market value of the acquired land of the petitioners therein. The Railways, on the other hand, raised a dispute that the proceedings before the Arbitrators were initiated by the landowners and the Railways which was dragged to the arbitration proceedings, cannot be asked to pay entire cost which has to be shared by both the sides as per the Arbitration and Conciliation Act, 1996. On the said issue, it was held by this Court that if the Railways desires the implementation and progress of the projects like Dedicated Freight Corridor expeditiously, it is also under the obligation that the aspect of compensation is not delayed and it should not resort to such provisions of Arbitration Act, 1996 to fasten the liability on the persons whose land have been acquired, which will be adding insult to the injury as they would be made to shell out the portion of compensation when they were praying for enhanced compensation on the ground that the amount determined was lessor then the market value. Direction was, thus, given to the Union of Page 8 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined India, Ministry of Railways to make necessary arrangements for expeditious disposal of the arbitration proceedings.
12. It seems that the dispute remained pending for sometime and the landowners had preferred applications for interim award to grant interim compensation at rate at which the adjoining government land were valued. It seems that an award dated 15.01.2016 had been passed by the Arbitrator in Arbitration Reference No. 8 of 2012, whereby the arbitration reference preferred by the claimants therein against the award dated 08.06.2011 was rejected. Similar orders were passed rejecting the other arbitration reference appended with the writ petition as Annexure 'V'.
13. It seems that there was some dispute with regard to determination of compensation for the government land and letters were written by the Director, Executing Agency namely DFCCIL to the Principal Secretary, Government of Gujarat in respect of rates of the acquired lands in the State of Gujarat for DFCCIL projects. A perusal of one of such Page 9 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined letter dated 23.02.2017 indicates that the Executing Agency namely DFCCIL had raised a dispute that the Western Dedicated Freight Corridor to offer state-of-the-Art High speed, high capacity freight transport infrastructure is one of the most ambitious project of the Country. However, in connection with the land acquisition, for this mega project in the State of Gujarat, the issue of demand of very high rates for transfer of Government land, as against the rates of adjoining private lands arrived at under the provisions of the Railways Act, 1989, was raised by the DFCCIL in a number of Forum. It was decided in the high level meeting convened by the Principal Secretary to the Prime Minister that the Railways shall submit a proposal to the Government of Gujarat for charging reasonable rates for transfer of government land for DFC projects (Dedicated Freight Corridor). It was asserted that no different methodology can be adopted for valuing the government lands and private lands and acquisition for both the lands valuation methodology as prescribed in Section 20F(8) of the Railways Act, 1989 will have to be mandatory followed. Page 10 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023
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14. It seems that in the interregnum an interim award dated 16.05.2015 was passed by the Arbitrator which was confirmed by the concerned Court under Section 34 of the Arbitration Act, 1996 in the challenge raised by DFCCIL, vide order dated 18.03.2017. First Appeal No. 1977 of 2018 had been filed before the High Court, which was decided vide order dated 02.07.2018 upholding the interim award on the basis of the report of the Committee which was specially constituted to determine the market value in view of the above noted disputes. It was, however, noted that the interest @ 15% awarded by the Arbitrator is against the statutory provisions under Section 20H(5) which recognises 9% interest per annum from the date of taking possession till actual payment. The direction was, thus, issued to deposit the entire compensation awarded by the Arbitrator under the interim award with the statutory solatium, but with simple interest @ 9% per annum from the date of taking possession to the date of actual deposit before the concerned court. The claimants were also permitted to withdraw 50% of the Page 11 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined compensation and remaining was directed to be deposited in a nationalized bank. This order was passed by the Division Bench of this Court in the year 2018 in the First Appeal filed by the Western Dedicated Freight Corridor Corporation of India.
15. At this stage, we may note that the beneficiary acquiring body namely Western Dedicated Freight Corridor Corporation of India Ltd. has not been impleaded in the present writ petition.
16. It may further be noted that DFCCIL filed a Special Leave Petition (Civil) Diary No(s) 40985/2018 before the Apex Court against the judgment and order dated 02.07.2018 passed by this Court which was dismissed after condonation of delay. A Review Application filed by the Corporation had also been dismissed vide judgment and order 23.10.2019 by the Apex Court which is appended at page '323' of the paper- book.
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17. It is stated in the writ petition that the petitioners herein filed a Writ Petition(s) (Civil) No(s). 276/2023 @ DY. No. 40351/2022 under Article 32 of the Constitution of India before the Apex Court to strike down the provisions of the Railways Act, however, the Apex Court had refused to entertain the said petition and observed that the petitioner may approach the High Court under Article 226 of the Constitution of India.
18. The contention of the learned counsel for the petitioners is that the petitioners' right to property being constitutional right protected under Article 300-A of the Constitution of India, stood infringed at the instance of the respondents in view of the discriminatory provisions of the Railways Act, 1989.
19. It was argued that the Reference made by the petitioners herein before the Arbitrator had been rejected vide award dated 06.10.2023 after filing of the instant petition, which further substantiates the contentions of the Page 13 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined petitioners that arbitrators appointed by the Central Government vide notification dated 21.06.2010 have not acted independently. Being Government servants, they have illegally rejected the references for enhancement of compensation preferred by the petitioners. It is argued that the entire mechanism of appointment of Arbitrators by the Central Government being unilateral and biased, it is clear that the process of determination of market value of the acquired land has not been just and fair, which amounts to violation of Article 300-A of the Constitution of India. It is, thus, argued that the petitioners have no other remdy but to challenge the provisions of appointment of Arbitrators, which give ample power to the Arbitrators to decide the matter without taking recourse to the provisions of the law.
20. Having noted the above submissions made by the learned counsel for the petitioners and in light of the above noted facts, it is more than evident that the petitioners were contesting the matter of determination of market value by the competent authority before the Arbitrator for a period of Page 14 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined approximately 13 years without any demur or protest in the matter of appointment of Arbitrator. The proceeding has been prolonged on account of the dispute raised by the landowners pertaining to determination of compensation at the same rates demanded by the Gujarat Government for its lands. DFCCIL namely the Corporation which is not impleaded herein, was agitating the demand raised by the State Government as also the similar rates demanded by the private landowners of providing compensation at the same rate at which the compensation was demanded by the State of Gujarat. It seems that the matter had been prolonged on account of the said disputes. The interim award was passed in the year 2016 and challenge to the same was raised upto the Apex Court, which issue was adjudicated in the year 2019.
21. Be that as it may, throughout these 13 years of pending disputes between the State Government, the Corporation DFCCIL and the landowners, the Arbitrators did not pass any final award, but the petitioners herein have Page 15 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined never raised any dispute regard to the mode and manner of their appointment, their independence or their impartiality. After a period of 13 years, it is not permitted for the petitioners to challenge the notification for appointment of Arbitrators on the ground that they being the officials of the State Government cannot be expected to act independently. Moreover, the challenge to the vires of the provisions of the Railways Act, 1989 in relation to the determination of compensation, the criteria for determination of market value and the interest rate prescribed under Section 20H(5) of the said Act, cannot be entertained on the plea of discrimination, inasmuch as, sub-section (9) of Section 22F provides for award of a sum of 60% on the market value as solatium, in consideration of the compulsory nature of acquisition. As far as interest is concerned, it may be noted that the power to take possession of the acquired land vested in the Central Government under the Railways Act is subject to the deposit of compensation under Section 20H(1) with the competent authority, which is to be paid to the persons interested in accordance with Sub-section (2) to (4) of the said Section. Page 16 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023
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22. In the present matter, it is more than evident that the dispute is being raised herein by the petitioners as an afterthought. In the matter of challenge to the vires of the provisions of law, raised before the Court by way of writ petition, the Apex Court in P.G.F. Ltd v. Union of India reported in (2015) 13 SCC 50, has laid down certain guidelines as a caution noticing that on many occasion, challenge to the provisions of law as to its constitutionality is raised with a view to thwart applicable and rigors of those provisions and as an escape route from the applicability of those provisions of law. It is held that it is, therefore, imperative and worthwhile to examine such frivolous challenges at the threshold as to whether such challenges made are bona fide and do require consideration at all by Writ Court by applying principle of "lifting the veil" and as to whether there is any hidden agenda in perpetrating such litigation. The guiding principles laid down therein in paragraph '37' are relevant to be noted hereinunder : -
"37. The Court can, in the first instance, examine whether there is a prima facie strong ground made Page 17 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined out in order to examine the vires of the provisions raised in the writ petition. The Court can also note whether such challenge is made at the earliest point of time when the statute came to be introduced or any provision was brought into the statute book or any long time-gap exists as between the date of the enactment and the date when the challenge is made. It should also be noted as to whether the grounds of challenge based on the facts pleaded and the implication of the provision really has any nexus apart from the grounds of challenge made. With reference to those relevant provisions, the Court should be conscious of the position as to the extent of public interest involved when the provision operates the field as against the prevention of such operation. The Court should also examine the extent of financial implications by virtue of the operation of the provision vis-à-vis the State and alleged extent of sufferance by the person who seeks to challenge based on the alleged invalidity of the provision with particular reference to the vires made. Even if the writ court is of the view that the challenge raised requires to be considered, then again it will have to be examined, while entertaining the challenge raised for consideration, whether it calls for prevention of the operation of the provision in the larger interest of the public. We have only attempted to set out some of the basic considerations to be borne in mind by the writ court and the same is not exhaustive. In other words, the writ court should examine such other grounds on the above lines for consideration while considering a challenge on the ground of vires to a statute or the provision of law made before it for the purpose of entertaining the same as well as for granting any interim relief during the pendency of such writ petitions. For the abovestated reasons it is also imperative that when such writ petitions are entertained, the same should be disposed of as Page 18 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined expeditiously as possible and on a time-bound basis, so that the legal position is settled one way or the other."
23. It may not be out of place to mention here that as per the stand of the petitioners in the instant writ petition, on the applications preferred by the land-owners in the case of the acquired lands of the village Runn and other villages, interim award was passed by the Arbitrator granting interim award @ Rs. 252/- per sq. mtrs. (40% of the rate applied for the government land being Rs. 630/- per sq. mtrs.). In some of the matters, final award dated 15.01.2016 had also been passed by the Arbitrator as early as on 15.01.2016. The interim award dated 16.05.2016 was confirmed by the concerned competent Court with the dismissal of the applications under Section 34 of the Arbitration Act preferred by the DFCCIL. First Appeals were also dismissed by this Court in the year 2018.
24. The dispute essentially raised by the petitioners as well as other land-holders was that the rates demanded by the Government of Gujarat for adjoining government lands Page 19 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined shall be applied for determination of the compensation for the private lands, subject matter of acquisition. The fact that the negotiations were going on between the Central Government and the Government of Gujarat with respect to the government lands which were needed for the project, cannot be a reason for the petitioners to keep mum and not to challenge the appointment of arbitrator in the year 2010 by the notification issued by the Central Government and the proceedings conducted by it over the period of 13 years.
25. For the delay on the part of the Arbitrator, if any, in determination of the dispute, appropriate course of action for the petitioners was to approach this Court by seeking appropriate relief to expedite the matter by demonstrating that the Arbitrator sat tight over the matter. In any case, the grounds taken in the writ petition to strike down the provisions of Sections 20F(6), 20F(7), 20F(9), 20G(1)(i), 20H(5) and 20N of the Railways Act, 1989 as unconstitutional being violative of Article 14 of the Constitution of India and to declare appointment of Arbitrators by the notification dated Page 20 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined 21.06.2010 bad in law, are unsustainable. The contention that the Arbitrators are not competent or not qualified to be appointed, is unsubstantiated for the reasons that the State officers of the concerned departments have been appointed as Arbitrators, who are having exclusive knowledge about the nature of the lands-in-question and matters pertaining to determination of compensation. The assertions that the Central Government is having control over the State officials, who have been appointed as Arbitrators by the aforesaid notifications, are baseless. Moreover, for any error on the part of the Arbitrators in adjudication the reference, alternative efficacious remedy to file an application under Section 34 of the Arbitration and Conciliation Act' 1996 before the competent Court is with the petitioners.
26. For the aforesaid, we do not find any merit in the writ petition, the same is, accordingly, dismissed. However, liberty is with the petitioners to challenge the arbitral award dated 06.10.2023 by invoking the provisions of Section 34 of the Arbitration and Conciliation Act, 1996 on all available Page 21 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023 NEUTRAL CITATION C/SCA/17199/2023 ORDER DATED: 08/12/2023 undefined grounds with them. It is clarified that any observations made hereinabove or reference made by us as to the competence of the Arbitrators or any dispute related to their impartiality, would not come in the way of the petitioners in raising such challenge and the First Appellate Court shall be required to decide all issues raised before it independently without being influenced by any of the observations made hereinabove.
(SUNITA AGARWAL, CJ ) (ANIRUDDHA P. MAYEE, J.) AMAR SINGH Page 22 of 22 Downloaded on : Mon Dec 11 20:38:56 IST 2023