Patna High Court
National Highway Authority Of India vs Sri Vijay Kumar Singh on 5 April, 2023
Author: Rajeev Ranjan Prasad
Bench: Rajeev Ranjan Prasad
IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.651 of 2021
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National Highway Authority of India represented through its Project Director,
Project Implementation Unit- Sasaram situated at Village and Post- Moresarai
(Near Satyam Service Centre), District- Rohtas, Sasaram (Bihar) 821113.
... ... Appellant
Versus
1. Sri Vijay Kumar Singh S/o Late Bhaiya Ajit Nath Singh Resident of Village
and P.O.- Deo, Anchal and P.S.- Madanpur, District- Aurangabad (Bihar).
2. The Arbitrator-cum-Additional Collector, Aurangabad.
3. The State of Bihar through the Competent Authority cum Deputy Collector
Land Reforms, Aurangabad.
... ... Respondents
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Appearance :
For the Appellant : Mr. (Dr.) K. N. Singh, ASG
Mr. (Dr.) Maurya Vijay Chandra, SC, NHAI
Mr. Gaurav Govinda, Advocate
Mr. Rishav Ranjan, Advocate
For the Respondent No.1 : Mr. J. S. Arora, Sr. Advocate
Mr. Manoj Kumar, Advocate
Mr. Dhananjay Kumar Tiwary, Advocate
Mr. Arun Kumar Bhagat, AC to AAG -12
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CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
CAV JUDGMENT
Date : 05-04-2023
The present Miscellaneous Appeal has been filed under
Section 37 of the Arbitration and Conciliation Act 1996
(hereinafter referred to as the 'Act of 1996') for the following
reliefs:-
"1. That the present Misc. Appeal is being filed for
setting aside the judgment dated 02.07.2021 passed by
the learned Additional District Judge VIII,
Aurangabad in Civil Misc. Application Case No. 79 of
2018 / 02 of 2021, whereby and where under the order
dated 14.02.2017 in L.A Case No. 102/2016-17 passed
by the Respondent No. 2 (Arbitrator-cum-Additional
Collector, Aurangabad) (Annexure-4) has been up-
Patna High Court MA No.651 of 2021 dt.05-04-2023
2/36
held and the original award dt-30.11.2015 in L.A Case
No. 58 (IX) of 2012-13 passed by the Respondent
No.-3 (Competent Authority - Cum-CDLR,
Aurangabad) (Annexue 3) has been set aside.
(ii) For setting aside the order dated 14.02.2017 in L.A
Case No. 102/2016-17 passed by the Respondent no.-2
(Arbitrator-Cum-Additional Collector, Aurangabad)
(Annexure-4) by which the original award dt-20-11-
2015 has been directed to be modified in terms of the
observations made therein.
(iii) For setting aside the Revised award dt-22-07-
2021 passed by the Respondent no.-3 in pursuance of
the order dt-02-07-2021 (Annexure-7) . As a result
the amount of compensation has been increased from
Rs. 88,77,420/- in terms of original award to Rs.
13,88,57,762/- according to the revised award for the
same plot of land. This increase is more than 1500%
only due to change in classification of land from
agricultural to commercial."
Brief Facts of the Case
2. The National Highways Authority of India
(hereinafter referred to as the 'NHAI') was entrusted with the
work of widening/six laning work of NH-2 (Aurangabad-
Chordaha Section) in the district of Aurangabad. In connection
with this work, an acquisition proceeding in respect of a piece of
plot bearing no. 1461 khata No. 171 measuring area 0.3887
hectare in Village Madanpur Anchal-Madanpur, District-
Aurangabad (Bihar) owned and possessed by the respondent no.
1 was initiated in accordance with the provisions of National
Patna High Court MA No.651 of 2021 dt.05-04-2023
3/36
Highways Act, 1956 (hereinafter referred to as the 'Act of
1956'). A Gazette notification dated 14.01.2013 under Section
3A of the Act of 1956 followed by a notification dated
06.01.2004under Section 3D of the same Act was issued in which the land in question was classified as agricultural land on the basis of actual land usage as on 14.01.2013.
3. The District Level Committee entrusted with the work of classification of the nature of the land conducted site verification of the land and recommended the nature of land as agricultural land. Based on the said recommendation, the respondent no. 3 who is the Competent Authority-cum-DCLR, Aurangabad determined the compensation and communicated the amount payable to the Project Director, NHAI, Dhanbad vide his letter No. 647 dated 30.11.2015 (Annexure-3 to the Memo of Appeal). In respect of the land in question, in L.A. Case No. 58(IX)/2012-13 the competent authority found the respondent no. 1 entitled for Rs.88,77,420/-.
Challenge to the compensation determined by the competent authoirty.
4. Aggrieved by and dissatisfied with the compensation determined by the respondent no. 3, the land owner-respondent no. 1 filed an application under Section 3G(5) Patna High Court MA No.651 of 2021 dt.05-04-2023 4/36 of the Act of 1956 before the Arbitrator (respondent no. 2). On behalf of the land owner, it was contended that on the land in question weekly cattle fair is being held for last 70 years. The land is registered in the name of the mother of respondent no. 1 and she had been paying tax to the Market Committee. It was contended that the land under acquisition is totally commercial and compensation should be determined accordingly. The land owner assailed the compensation determined by the competent authority. From the arbitration award dated 14.02.2017 as contained in Annexure '4' to the memo of appeal, it appears that the Additional Collector, Aurangabad who was acting as the Arbitrator went for inspection of the land and in course of his inspection, he took a view that the land is fully commercial, hence, compensation should be fixed accordingly. Having held that the land in question is fully commercial, the learned Arbitrator remitted the matter with a direction to the competent authority to ensure further action.
5. The award dated 14.02.2017 was challenged by the NHAI by filing an application under Section 34 of the Act of 1996 before the learned District Judge, Aurangabad but it was titled as Arbitration Appeal No. 06 of 2017. After filing, it was revealed that there was no column in the computer device to Patna High Court MA No.651 of 2021 dt.05-04-2023 5/36 register an Arbitration Appeal and the court has no power to entertain an Arbitration Appeal.
6. Learned counsel for the appellant was informed this at the time of Admission that the court has power to entertain an application under Section 34 of the Act of 1996 in form of "Civil Miscellaneous Application". It is submitted that in such circumstance, as advised, the appellant filed an application seeking permission to withdraw the case with a view to refile the case with the title Civil Miscellaneous Application case. The applicaiotn was allowed on 30.08.2018. Thereafter, on 01.10.2018 a miscellaneous case being Misc. Case No. 79 of 2018 was registered in which the Siristedar reported that there is a delay of 576 days in filing. The appellant filed an application in which he contended that the applicant was prosecuting his remedy in Arbitration Appeal under a bonafide belief hence, the period spent till 30.08.2018 are liable to be excluded while counting the period of limitation. By order dated 06.03.2019, the learned Judge admitted the case on payment of cost of Rs. 2500/-, thereafter, the Miscellaneous Case was heard and disposed of vide impugned judgment dated 2nd July, 2021.
7. The learned Additional District Judge-VIII, Aurangabad first of all examined as to whether the application Patna High Court MA No.651 of 2021 dt.05-04-2023 6/36 under Section 34 of the Act of 1996 is within the period of limitatoin or not. On this issue, the learned court held that the applicant filed the present petition after delay of 576 days of prononoucement of award dated 14.02.2017. It has been held that the applicant did not apply for certified copy of the award in question promptly and deligently and no plausible explanation has been given by the applicant for this inordinate delay in receiving certified copy of the award in question. The court held that the petition/application under Section 34 of the Act of 1996 is barred by law of limitation and deserves to be dismissed on this ground alone.
8. It further appears that the learned court took note of the fact that the application was admitted after the period of limiation and formed an opinion that it would be justiciable and justifiable to examine the application under Section 34 of the Act of 1996 and on merit also in order avoide the remand of the case, in case the Hon'ble High Court, in appeal, if filed reaches to a conclusion that the application was within the limitation and also on the principle that the act of the court should not prejudice any party of the case.
9. The learned court thereafter examined sub- Section (2) and sub-Section (3) of Section 34 of the Act of 1996, Patna High Court MA No.651 of 2021 dt.05-04-2023 7/36 the judgment of the Hon'ble Apex Court in the case of Associate Builders versus Delhi Development Authority reported in (2015) 3 SCC 49 and observed that the Hon'ble Supreme Court held that the Court applying public policy test to arbitration award does not act as court of appeal, therefore cannot correct errors of facts. The Court noted that the Additonal Collector, Aurangabad is a responsible Revenue Authority who is well-versed with the land matters and implementation of land and other cognate issues, policies, programmes and varous laws enacted for the same. The learned court found that the Arbitrator had conducted spot inspection and found that the weekly animal fair is being held by respondent on the land in question for 70 years. The videography of land in question was also done by the leanred Arbitrator and this, according to the learned court, amply establishes that the nature of the land is commercial. According to the learned court, the Arbitrator followed the established procedure of law and passed the impugned award in judicious manner, hence, no interference was required with the impugned award. The learned court, therefore, dismissed the application under Section 34 of the Act of 1996. In the aforementioned background the present appeal has been preferred. Patna High Court MA No.651 of 2021 dt.05-04-2023 8/36 Submission on behalf of the Appellant
10. Mr. K.N. Singh, learned Senior Counsel assisted by Mr. Gaurav Govinda, learned Advocate has assailed the impunged judgment passed by the learned ADJ-VIII, Aurangabad. Learned Senior Counsel submits that the learned court is not correct in saying that the application under Section 34 of the Act of 1996 was filed after 576 days. It is stated that the award was signed on 14.02.2017. A signed copy was delivered to the Project Director, NHAI vide MemoNo. 91 dated 16.02.2017. Initially the application was filed with an incorrect nomenclature "Arbitration Appeal" on 09.05.2017 i.e. within 82 days, hence, it was within the limitation prescribed under sub- section (3) of Section 34 of the Act of 1996. It is contended that the computer software of the court did not have the correct category of nomenclature, the incorrect nomenclature was pointed out by Sirishtedar on 14.09.2017 whereupon the court expressed its inability to entertain the petition. In view of what transpired in course of interaction with the court and learned counsel, the applicant/appellant filed an application to withdraw the case on 03.01.2018 with liberty to file fresh application. The said application seeking withdrawal was listed on 19.01.2018 but for various reasons, the petition for withdrawal was allowed Patna High Court MA No.651 of 2021 dt.05-04-2023 9/36 only on 30.08.2018. In this connection, learned Senior Counsel submits that the reason for withdrawal of initial application may be found from the petition itself which is Annexure '5' to the Memo of appeal. The prayer made in the said petition clearly indicates that the withdrawal was sought with a view to refile the case with title "Civil Miscellaneous Application".
11. Learned Senior Counsel submits that in the circumstances, first application which was wrongly containing the title "Arbitration Appeal" was withdrawn with permission of the court and the fresh application giving rise to Civil Miscellaneous Application Case No. 79 of 2018 was registered within 32 days of the withdrawal. The court, while permitting the appellant to withdraw Arbitration Appeal No. 06 of 2017 did not fix anydate for re-filing. It is submitted that in such circumstances, Section 14 of the Limitation Act would apply and in computing the period of limitation the time spent in prosecuting the earlier application with due deligence shall be excluded.
12. Learned Senior Counsel submits that the learned court below could not appreciate that an application was duly filed showing the bonafide reasons and application of Section 14 of the Limiation Act, it was heard and on being Patna High Court MA No.651 of 2021 dt.05-04-2023 10/36 satisfied the learned court admitted the application vide order dated 06.03.3019. The learned court imposed a cost of Rs.2,500/- which was to be deposited in the Nazarat of the court. This order was complied with by the appellant by depositing the cost amount in Nazarat on 16.01.2020. It is contended that the order allowing the withdrawal of first application as well as the order admitting the civil miscellaneous application on refiling were passed by the same and one learned judge. It is, thus, contended that the learned court has consciously passed the order condoning the delay which was never challenged by the respondent no. 1 and no specific plea was taken in course of hearing of the miscellaneous application on this issue, therefore, the learned court was not justified in taking up the issue of limitation once again on its own will and volition.
13. Reliance has been placed on the judgment of the Hon'ble Supreme Court in the case of Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Ors. reported in (2008) 7 SCC 169; M.P. Steel Corporation Vs. Commissioner of Central Excise reported in (2015) 7 SCC 58 and Simplex Infrastructure Limited Vs. Union of India reported in (2019) 2 SCC 455 and Patna High Court MA No.651 of 2021 dt.05-04-2023 11/36 in the case of Oriental Insurance Company Limited Vs. Tejparas Associates And Exports Private Limited reported in (2019) 9 SCC 435
14. Submission is that Section 14 shall be interpreted in a liberal and equitable manner. It is contended that although in the Simplex Infrastructure Limited (supra) case, the case was dismissed on facts but the Hon'ble Supreme Court upheld the application of Section 14 of the Limitation Act. It is contended that in the case of Union of India Vs. West Coast Paper Mills Limited reported in (2004) 3 SCC 458, it has been held that Section 14 is equitable provision and shall be interpreted in like manner. In the case of Tejparas Associates And Exports Private Limited (supra) the Hon'ble Supreme Court held that re-presentation of a petition in court cannot be considered as a fresh filing. In the present case, although the withdrawal petition was filed seeking permission to re-file but in fact it was nothing but a case of mere change in the nomenclature on the petition earlier presented on 09.05.2017.
15. Learned Senior Counsel for the appellant has assailed the award dated 14.12.2021. It is contended that under Section 3G of the Act of 1956, the competent authority under sub-Section (1) or (2) of Section 3G is obliged to determine the Patna High Court MA No.651 of 2021 dt.05-04-2023 12/36 amount and if the said amount is not acceptable to either of the parties, the amount shall, on an application by either of the parties be determined by the Arbitrator.
16. Learned Senior Counsel submits that the statutory mandate to the Arbitrator is to determine the correct amount. It means the Arbitrator has to not only decide the nature of the land but also the applicability of the rate/market value of the land keeping in mind the considerations as provided under sub-section (7) of Section 3-G of the Act of 1956. It is contended that in the case of Project Director NHAI Vs. M. Hakeem and Another reported in (2021) 9 SCC 1 paragraph '49', it has been held that the Arbitrator is bound to arrive on the market value while determining the compensation. The court also held that MVR was only for the purposes of stamp duty. In the said case, the Hon'ble Supreme Court held that the award rendered by the Arbitrator was on a completely perverse basis i.e. by taking into account "guideline value" which is relevant only for stamp duty purposes, and not taking into account sale deeds which would have reflected the proper market value of the land. It is, thus, submitted that Section 3G (7) calls upon the Arbitrator to consider the prescribed factors while determining the amount and, therefore, the Arbitrator has to take into Patna High Court MA No.651 of 2021 dt.05-04-2023 13/36 consideration all those factors while determining the "amount". It is contended that the Arbitral Tribunal cannot delegate its own power when the statute does not provide for the same. Reliance in this regard has been placed on the judgment of the Hon'ble Allahabad High Court in the case of Bhartiya Rashtriya Rajmarg Pradhikaran Vs. Rajesh Kaushik and Others reported in 2021 SCC Online Allahabad 24. It is submitted that in the present case, the learned Arbitrator has not determined the amount. He has only recorded a finding that the land in question is a commercial land. This cannot be said to be an award as required under the law.
17. Learned Senior Counsel further submits that in an acquisition under the Act of 1956, in the matter of an arbitral proceeding, the provisions laid down under the Act of 1996 are required to be followed. It is submitted that in the case of National Highways Authority of India Vs. The State of Bihar and Others reported in 2023(1) PLJR 518 this Court has categorically held that the Arbitrator under sub-Section (5) of Section 3G of the Act of 1956 would be obliged to take up the arbitration proceeding keeping in view the procedure laid down under the Act of 1996. In the present case, no statement of claim or statement of defence was filed. No evidence was led by the Patna High Court MA No.651 of 2021 dt.05-04-2023 14/36 parties and the Arbitrator himself went to the land in question without any notice to the appellant, got video recording of the same and recorded a finding that the land is a commercial land. It is contended that the Arbitrator should have resorted to Section 26 of the Act of 1996 by appointing an expert to get the land examined and submitted his opinion with respect to the status of the land as on the date of notification under Section 3A of the Act of 1956. It is, thus, submitted that the Arbitral award is perverse and non-observance of the procedures established by law would render the award bad in law as against the fundamental legal principles followed in India. Thus, it is fit to be set-aside under Explanation I of sub-clause (ii) of Clause (b) under sub-section (2) of Section 34 of the Act of 1996. It is submitted that the learned ADJ-VIII, Aurangabad has not appreciated this aspect of the matter while considering the challenge made to the award.
18. Learned Senior Counsel further contends that in this case, the land cannot be treated as commercial land. It was never converted, the land usage was never changed in accordance with the provisions of the Bihar Agriculture Land (Conversion for Non-agriculture Purposes) Act of 2010. It is submitted that in the Khatiyan, the land is registered as Patna High Court MA No.651 of 2021 dt.05-04-2023 15/36 agricultural land and there was no conversion of land usage prior to the notification under Section 3A of the Act of 1956. The learned ADJ-VIII is not justified in rejecting the contention of the appellant stating that it is a hyper technical plea. Reliance has been placed on the judgment of the Hon'ble Supreme Court in the case of State of Karnataka Vs. Shankar Textile Mills reported in (1995) 1 SCC 295 to submit that mere fact that at the relevant time, the land was not used for agricultural purpose or purposes sub-subservient thereto or used for non-agricultural purpose, assuming it to be so, would not convert the agricultural land into a non-agricultural land for the purposes either of the Revenue Act or Karnataka Land Reforms Act. The Hon'ble Supreme Court held that the land must have been converted, to hold otherwise would defeat the object of both the acts and would, in particular, render the provision nugatory.
19. Learned Senior Counsel further submits that as per the case of respondent no. 1, weekly cattle fair/pashu mela is being held on the land in question. It is submitted that 'niji pashu mela' is covered under wide umbrella of agricultural activity. It is an activity intrinsically connected with agriculture and is held on agricultural land and not within confines/boundary of market and it enhances productivity of Patna High Court MA No.651 of 2021 dt.05-04-2023 16/36 land and cattle are used by agriculturists. Section 2(1)(a) read with Schedule of the Agriculture Produce Market Act, 1960 includes cattle.
20. Reliance has been placed on the judgment of the Hon'ble Patna High Court in the case of Kesho Singh Vs. the State of Bihar and Ors reported in 1992 (1) PLJR 457 (paragraph '5'), wherein it has been held that the definition of agricultural produce given under Section 2(1)(a) of the Act read with item no. 3 of part VIII of the Schedule, cattle are also agricultural produce for the purpose of the Act. The judgment also emphasizes that the raiyati mela rights cannot be settled to any other person. It is contended that the right to hold the mela was consequence of the raiyati rights and cannot change its khatiyani matter. It is submitted that the appellant had, in its supplementary petition dated 23.01.2021, in the court had raised objection on the findings of the Arbitral Tribunal and its conclusion of the land being commercial land based on the potential of the vicinity area but the same has not at all been considered.
21. On the strength of the aforementioned submissions, learned Senior counsel for the appellant submits that the Arbitral tribunal has failed to follow the procedures Patna High Court MA No.651 of 2021 dt.05-04-2023 17/36 established by law. The Arbitrator did not provide any opportunity to the appellant to examine or controvert the evidence of the respondent or of the said inspection/video recording. The Arbitrator himself became a witness in this case. This, according to the appellant, strikes at the very root of the award rendering it as being in gross violation of the principles of natural justice. It is contended that the award is liable to be set aside under Section 34 (2) (a) (iii) and 2(b) (ii) of the Act of 1996.
Submissions on behalf of Respondent no. 1
22. The appeal has been contested by Mr. J. S. Arora, learned Senior counsel representing respondent no. 1. Learned Senior Counsel contended that the learned court below has rightly held that the Miscellaneous Case No. 79 of 2018 was barred by limitation. It is submitted that the order dated 06.03.2019 condoning the delay was passed behind the back of the respondent. It is submitted that the learned court below had no jurisdiction to entertain the application under Section 34 of the Act of 1996 after expiry of a period of 120 days. It is submitted that Section 5 of the Limitation Act has got no application in this case. Reliance had been placed on the judgment of the Hon'ble Supreme Court in the case of Simplex Patna High Court MA No.651 of 2021 dt.05-04-2023 18/36 Infrastructure Limited (supra) and BBM Enterprises vs. The State of West Bengal reported in (2020) 9 SCC 448 . It is contended that under Section 34, there is a specific provision to file the objection within 90 days which may be extended maximum by 30 days more i.e. 120 days and, therefore, the Court has no jurisdiction to entertain the objection on the award, in any case, beyond 120 days. It is submitted that the objection to the award was filed by the petitioner/appellant on 09.05.2017 which was after 84 days but the said objection was not competent since there was no certified copy of the award along with the said objection and, therefore, the date on which it was filed cannot be treated as the date of filing of the objection. It is submitted that the certified copy was filed by the petitioner/appellant only on 07.08.2017 and if that date is taken as filing of the petition then same would be much after the period of 120 days.
23. Learned Senior Counsel further submitted that while the proceeding was continuing, Sirishtedar report was submitted and the petitioner/appellant was repeatedly directed by the learned court below to argue on the point of admission but they remained absent from the court for 105 days without taking any step and even thereafter they filed petition for time. Patna High Court MA No.651 of 2021 dt.05-04-2023 19/36 If the dates are included then the period comes to 139 days from 14.03.2018 to 31.07.2018 and the said period apparently shows that the petitioner/appellant did not prosecute the said proceeding in good faith with due diligence. It is contended that there was no order of the court saying that the case is not maintainable or that the petitioner/appellant would address on the point of maintainability. Contention is that there was complete lack of bona fide on the part of the petitioner/appellant which would be apparent from the ordersheets of the Miscellaneous Case.
24. Learned Senior counsel has contested that Section 14 of the Act of 1996 would be applicable in the facts of the present case. It is submitted that the petitioner/appellant has completely failed in demonstrating as to what was the defect in the first case and even if it is found that a wrong provision is quoted or wrong labelling is given, that shall not affect the merit of the case nor that can be a ground for rejection of an application. It is contended that Miscellaneous Case No. 79 of 2018/ 2 of 2021 was hopelessly barred by limitation and the court was not competent, rather the court was inherently lacking jurisdiction to entertain the said miscellaneous case after 120 days. In such circumstance, the court was not competent to Patna High Court MA No.651 of 2021 dt.05-04-2023 20/36 condone the delay and even as there is an order of the court regarding that, the same cannot save the proceeding or the right of the concerned party.
25. Learned Senior counsel has further argued that the learned Arbitrator is fully justified in conducting the inspection and recording a finding that several commercial activities are going on in and around the land in question. In fact, the Arbitrator had videographed the same. It is contended that the appellant did not produce any material whatsoever to show that the said land is an agricultural land rather they only relied upon the cadestral survey which was prepared in and around the year 1910.
26. Learned Senior counsel submits that the value of the entry of Cadestral survey Khatiyan, though, has to be presumptory value but it weakens veins through passage of time and hence, the contention of the petitioner/appellant are not fully correct. It is contended that this Court should not accept the nature of the land shown in and around the year 1910. It is submitted that the finding of the Arbitrator that the land in question is a commercial land on the date of acquisition and not agricultural land is not suffering from any jurisdictional error. It is reiterated that the land was being used for commercial Patna High Court MA No.651 of 2021 dt.05-04-2023 21/36 purposes for more than 70 years.
27. Learned Senior counsel further submits that under Section 37 of the Act of 1996, this Court while hearing an appeal arising out of an order under Section 34 of the Act of 1996 cannot enter into the question of facts decided by the Arbitrator. It is submitted that the present appeal is liable to be dismissed.
Consideration
28. Having heard learned Senior counsel for the parties and on the perusal of the records, this Court finds that the issue of limitation has been contested hotly by the parties. It would, thus, be just and proper to reproduce Section 34 of the Act of 1996 hereunder:-
"34. Application for setting aside arbitral award.-(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub- Section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if
--
(a) the party making the application 1[furnishes proof that]
--
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral Patna High Court MA No.651 of 2021 dt.05-04-2023 22/36 proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.1
[Explanation 1.--For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,--
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
1.Substituted by Act 33 of 2019, S. 7, for "furnishes proof that" (w.e.f. 30-8-2019). Patna High Court MA No.651 of 2021 dt.05-04-2023 23/36 Explanation 2.--For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail aew on the merits of the dispute.] 2 [(2-A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.] (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.3
[(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.]"
2. Inserted by Act 3 of 2016, S. 18 (w.r.e.f. 23-10-2015).
3.Substituted by Act 33 of 2019, S. 7, for "furnishes proof that" (w.e.f. 30-8-2019). Patna High Court MA No.651 of 2021 dt.05-04-2023 24/36
29. It is evident on perusal of sub-Section (3) of Section 34 of the Act of 1996 that an application for setting aside may not be made after three months have elapsed from the date on which the party making the application had received the arbitral award. Proviso to sub-Section (3) says that if the court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months, it may entertain the application within a further period of 30 days but not thereafter.
30. In the present case the Award was signed on 14.02.2017 but was delivered on 16.02.2017 in terms of sub- section (5) of Section 31 of the Act of 1996. Under sub-section (3) of Section 34 the limitation starts running from the date of delivery of the Award. It does not require filing of a certified copy of the Arbitral Award with the application under Section 34 of the Act of 1996. There is, thus, no iota of doubt that on 09.05.2017 when the application under Section 34 was presented, it was well within limitation. The only issue with this application was that the title/nomenclature of the case was written as "Arbitration Appeal". It was registered as Arbitration Appeal No. 06 of 2017 in the same court where it should have been registered as a Civil Miscellaneous Case. Patna High Court MA No.651 of 2021 dt.05-04-2023 25/36
31. To this Court, it appears that the only thing required to be done at this stage was to request the court to allow the applicant to change the title/nomenclature on the petition and register it as 'Civil Miscellaneous Case". The learned court was well competent to exercise inherent powers of the court to allow such corrections in the title/nomenclature of the petition. Instead doing it, the learned counsel for the applicant filed an application pointing out the difficulties which transpired in the court proceeding and sought permission to withdraw the appeal with a view to re-file the same as "Civil Miscellaneous Case". This application was allowed by the learned court on 30.08.2018, whereafter it was re-filed on 01.10.2018. In these circumstances, the question is as to whether Section 14 of the Limitation Act would come to the rescue of the applicant or not.
32. As regards the applicability of Section 14 of the Limitation Act, in the case of Consolidated Engineering Enterprises (supra), the Hon'ble Supreme Court held that the policy of this Section is to afford protection to a litigant against the Bar of limitation when he institutes a proceeding which by reason of some technical defect, cannot be decided on merits and is dismissed. It has been held that there is no provision Patna High Court MA No.651 of 2021 dt.05-04-2023 26/36 under the Act of 1996 which excludes the applicability of provision of Section 14 of the Limitation Act to an application submitted under Section 34 of the said Act. On the contrary, Section 43 makes the provision of Limitation Act, 1963 applicable to the arbitration proceeding. For an application of Section 14 of the Limitation Act, the Hon'ble Supreme Court laid down the conditions which must be satisfied. Paragraph '21' of the judgment in Consolidated Engineering Enterprises (supra) reads as under:-
" 21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:
(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue and; (5) Both the proceedings are in a court."
33. The bone of contention in the present case is as to whether the first case filed by the applicant/appellant had been prosecuted with due diligence and in good faith, or the failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature. This Court finds from the materials in form of entire ordersheets of the learned Additional Judge- Patna High Court MA No.651 of 2021 dt.05-04-2023 27/36 VIII, Aurangabad that in the order dated 09.05.2017, it is recorded that an arbitration appeal has been registered. The Registration of an application under Section 34 of the Act of 1996 was not in accordance with law. It was the duty of the Siristedar to immediately place his report on this which would have facilitated correction in the title portion of the petition. There was an inordinate delay of more than four months in submission of Siristedar report. Even at this stage, instead of asking the applicant to correct the nomenclature, it was given to understand that the appellant is required to withdraw the first case and re-file a fresh case titled "Civil Miscellaneous Application". Learned counsel for the applicant as well as the court never thought that a mere correction in the title portion would serve the purpose. Although on perusal of the objection, it would appear that a correction has been made in the title portion showing it an Arbitration Application No. 6 of 2017 but fact remains that learned court below allowed the applicant to withdraw it treating it an appeal and to re-file the same as Civil Miscellaneous Case. The order dated 30.08.2018 refers the 'applicant' as 'appellant'.
34. The contention of learned Senior counsel for respondent no 1 that the applicant/appellant did not pursue his Patna High Court MA No.651 of 2021 dt.05-04-2023 28/36 application with due diligence would not appeal to this Court. There is no such finding of the learned Court below. In fact on re-filing of Civil Miscellaneous Application within 32 days from 30.08.2018, the same learned court considered the reason for re- filing and admitted the Miscellaneous Case subject to payment of cost of Rs. 2500/-. The order dated 06.03.2019 by which Miscellaneous Case was admitted has not been questioned by respondent no. 1.
35. At the time of final hearing, the learned Court below has, in fact, proceeded to consider the question of limitation and held that the application was barred by limitation because it was presented after 576 days of the pronouncement of the award.
36. To this Court, in the facts of the present case, the first application being well within the period of limitation, the circumstances leading to re-filing of Civil Miscellaneous Case are such that the period spent from 09.05.2017 up to 30.08.2018 are liable to be excluded by applying Section 14 of the Limitation Act. On such exclusion the total period taken in filing of second application would come to 114 days only ( 82 days + 32 days).
37. As regards the plea taken with regard to the Patna High Court MA No.651 of 2021 dt.05-04-2023 29/36 obtainment of the certified copy, this Court has not been shown any provision wherein the filing of the certified copy of the award would be must for filing an application under Section 34 of the Act of 1996.
38. Learned Senior counsel for the respondent no. 1 has relied upon the judgment of the Hon'ble Supreme court in the case of Simplex Infrastucture Limited (supra), however, learned Senior Counsel for the appellant has distinguished the judgment of the Hon'ble Supreme Court in the case of Simplex Infrasture Limited (supra) by contending that in the said case, the Court itself clearly stated that in respect of excluding the period exempted under Section 14, the application of the applicant was filed after 131 days, i.e. beyond the period of three months and 30 days (within 120-122 days).
39. Learned Senior counsel has further distinguished the judgment of the Hon'ble Supreme Court in the case of BBM Enterprises (supra) by contending that the cited judgment would have no application in the instant case. In the said case, no appeal was filed till the expiry of 120 days and challenge to arbitral award was made by the party only when the Execution Court had directed the RBI to disburse the same after attaching the government account. Similarly, the judgment in Patna High Court MA No.651 of 2021 dt.05-04-2023 30/36 the case of Commissioner of Madhya Pradesh Housing Board and Ors Vs. Mohanlal and Company reported in (2016) 14 SC 1999 has been distinguished saying that in the said case the contractor vide resorting to arbitral clause of the contract approached the Arbitral Tribunal for its claim. On being unsuccessful, he filed Section 11 petition in the High Court contending that Clause (29) was not a dispute adjudicating provision. It is contended that on again being unsuccessful in Section 11 petition he filed Section 34 (2) petition on 26.09.2011. In this context, the court interpreted the word "diligent" in the sense that Section 11 petition and Section 34 (2) petition were not the same proceedings and the contractor lacked both 'diligence' and 'bona fide' in the given set of facts.
40. In the opinion of this Court, the learned court below has completely erred in holding that the application under Section 34 of the Act of 1996 was barred by limitation. This Court finds that the learned court below was though conscious of the English maxim of equity "Actus curiae neminem gravabit" i.e. the act of the Court shall prejudice no man but could not appreciate that it was the same and one court which had permitted the applicant/appellant to withdraw the first case and to refile the same as Civil Miscellaneous Case. It was only a Patna High Court MA No.651 of 2021 dt.05-04-2023 31/36 case of change of title /nomenclature on the petitoin. In the facts of the present case the principles of Section 14 of the Limitation Act as well as the above mentioned maxim would come to the rescue of the appellant. Initially, the first case was filed within 82 days and thereafter the second case was filed with the permission of the Court within 32 days, therefore, the learned court had vide its' orrder dated 06.03.2019 rightly admitted the Civil Miscellaneous Case. This order was never challenged by the respondent no.1.
41. In the case of Tejparas Associates and Exports Private Limited (supra) an application under Section 34 of the 1996 Act was filed well within the period of limitation at Jaipur but the Jaipur court returned the same under VII Rule 10 of the Civil Procedure Code with a date fixed for filing of the same in the court at Jodhpur. The applicant re-presented the application in the court at Jodhpur with a delay of 8 days and as no extension was sought, the applicant filed an application under Section 3 of the Limitation Act for condonation of delay which was allowed. The issue was contested by respondent as a result whereof the application was rejected. The Hon'ble Supreme Court took note of the facts of the case and recorded in paragraphs 11 and 13 of the judgment as under:-
"11. Having noticed the said decisions, in the instant case Patna High Court MA No.651 of 2021 dt.05-04-2023 32/36 as already indicated above the condonation of delay sought is not for filing the petition under Section 34 of the 1996 Act for the first time. The petition filed under Section 34 of the 1996 Act at Jaipur was within the period of limitation and the delay regarding which explanation is put forth is for the period of 8 days in representing the petition beyond the date fixed after it was returned under Order 7 Rule 10 of the Civil Procedure Code. Therefore, in that circumstance even if the term "sufficient cause" as contained under Section 5 of the Limitation Act is taken note, in the present facts the same is not with reference to petition under Section 34 of the 1996 Act for condonation of delay beyond the period prescribed under Section 34(3) of the 1996 Act. Though that be the position what is necessary to be taken note herein is that the application filed for excluding the time is under Section 14 of the Limitation Act. In addition to the very decisions cited above indicating that Section 14 of the Limitation Act would be applicable to the proceedings under Section 34 of the 1996 Act subject to the petition under Section 34 being filed within time, the learned counsel for the appellant has also relied upon the decision in Consolidated Engg. Enterprises v. Irrigation Deptt. [Consolidated Engg. Enterprises v. Irrigation Deptt.8 wherein the same position is reiterated."
"13. In such circumstances, in the fact situation wherein the issue of delay had arisen only in the context of the delay of 8 days in re-presentation as permitted by the court at Jaipur, re-examination of the matter to consider the entire period spent before the court at Jaipur as mala fide so as to non- suit the appellant and deny consideration of proceedings under Section 34 of the 1996 Act which was initiated within the period of limitation at the first instance, on its merits will not be justified."
8 (2008 7 SCC 169 Patna High Court MA No.651 of 2021 dt.05-04-2023 33/36
42. This Court further finds that the learned Arbitrator has not at all followed the procedures provided under the Act of 1996 for conducting an arbitration proceeding. A bare perusal of the impugned arbitration award as contained in Annexure '4' would show that neither any statement of claim nor any statement of defence was invited by the arbitrator. No evidence was led by the parties. The arbitrator, on his own visited the spot, got the place videographed and then recorded a finding on the same as to the nature of the land. The procedure followed by the learned Arbitrator is not in consonance with the procedures established by the law and it has vitiated the entire arbitration award. The case of the appellant would be covered both under Section 34(2) (a) (iii) and Section 34 (2)(b)(ii) of the Act of 1996.
43. In the case of NHAI (supra), this Court has dealt in detail the procedure required to be followed in matters of arbitration arising out of application under sub-Section (5) of Section 3G of the Act of 1996. This Court held that the Arbitrator would be obliged to conduct the arbitration proceeding by following the procedure laid down in the Act of 1996.
44. This Court is in agreement with the submissions of Patna High Court MA No.651 of 2021 dt.05-04-2023 34/36 learned counsel for the appellant that the mandate of Section 3G of the Act of 1956 would require the Arbitrator to determine the "Amount" keeping in view the various considerations. Sub- section(7) of Section 3G is being reproduced hereunder for a ready reference:-
"(7) The competent authority or the arbitrator while determining the amount under sub-section (1) or sub-
section (5), as the case may be, shall take into consideration--
(a) the market value of the land on the date of publication of the notification under section 3A;
(b) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the severing of such land from other land;
(c) the damage, if any, sustained by the person interested at the time of taking possession of the land, by reason of the 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 change."
45. This Court finds from the Award of the learned Arbitrator that he has simply recorded his finding that the land is in the nature of a commercial land. Thereafter, he has remitted the record to the competent authority to proceed further. This is not in consonance with the scheme of the Arbitration under Patna High Court MA No.651 of 2021 dt.05-04-2023 35/36 Section 3G of the Act of 1956. Such order cannot be conferred with the statutory flavour of an Award. The Award is, thus, liable to be set-aside.
46. Since this Court has come to a conclusion that the impugned judgment of the learned Additional District Judge VIII, Aurangabad is liable to be set aside for the reason that it has failed to appreciate the perversity of the Award and for that reason the matter is required to be remitted to the Arbitrator for fresh consideration in accordance with law.
47. This Court is restraining itself from going into the contentions of learned Senior Counsel for the appellant that holding of a cattle fair on the land in question would not render the nature of the land as a commercial land. In the opinion of this Court, such question remains open for consideration by the Arbitrator on the basis of the evidence which may be led by the parties.
48. In result, this Court sets aside the impugned judgment dated 02.07.2021 passed by the learned Additional District Judge VIII, Aurangabad in Civil Misc. Application Case No. 79 of 2018 / 02 of 2021 as well the impugned Award. The matter is remitted to the Arbitrator to conduct the Arbitration in accordance with the procedures provided under the Act of 1996 Patna High Court MA No.651 of 2021 dt.05-04-2023 36/36 and pass an award in accordance with law within a period of four months from the date of receipt/production of a copy of this order.
49. This appeal is allowed to the extent indicated hereinabove.
(Rajeev Ranjan Prasad, J) avin/-
AFR/NAFR AFR CAV DATE 30.01.2023 Uploading Date 05.04.2023 Transmission Date