Gujarat High Court
National Highways Authority Of India vs M/S. Marine Container on 3 February, 2025
Author: Sunita Agarwal
Bench: Sunita Agarwal
NEUTRAL CITATION
C/FA/3191/2024 ORDER DATED: 03/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3191 of 2024
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2024
In R/FIRST APPEAL NO. 3191 of 2024
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NATIONAL HIGHWAYS AUTHORITY OF INDIA
Versus
M/S. MARINE CONTAINER & ORS.
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Appearance:
MR MAULIK G. NANAVATI FOR NANAVATI & CO.(7105) for the
Appellant(s) No. 1
NISHITH P ACHARYA(9308) for the Defendant(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 03/02/2025
ORAL ORDER
(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)
1. Heard learned counsel for the appellant and perused the record.
2. By means of the order dated 07.10.2024, this Court has referred the matter to the Med-Arb Center of the High Court in view of the submissions of the learned counsels for the parties that the issued pertaining to determination of just and fair compensation to the land owners may be deliberated between the parties through the process of mediation.
3. As per the mediation report, no settlement could be arrived between the parties. We, therefore, proceed on the merits of the case.
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4. The present appeal has been filed under Section 37 of the Arbitration and Conciliation Act' 1996 (for short, "the Act' 1996") to challenge the order dated 03.08.2024 passed by the Principal Judge, Amreli in Civil Misc. Application No. 33 of 2023 filed under Section 34 of the Act' 1996 read with Section 3G(5) of the National Highways Act' 1956 (for short, "the Act' 1956).
5. The said application was preferred against the award dated 10.02.2021 passed by the Arbitrator / Collector, Amreli in Arbitration Case No. 398 of 2021. While upholding the award passed by the learned Arbitrator, it is opined by the Court that under Section 34 of the Act' 1996, the Court is not empowered to interfere or set aside the award when it transpires that the learned Arbitrator has thoroughly complied with the statutory provisions and did not ignore any terms of the contract or any vital evidence. It was held that no patent illegality can be found in the award and the Court is not vested with the power to re-appreciate the evidence adduced before the learned Arbitrator.
6. Considering the challenge to the arbitral award dated 10.02.2021 passed by the Collector under Section 3G(5) of the Act' 1956 and the judgment dated 03.08.2024 under Section 34 of the Act' 1996, we may record that the land in question was acquired by undertaking acquisition proceedings under the Act' 1956. It is an admitted fact of the matter that the land in question was an agricultural land and on the date of the notification under Section 3A, i.e. the proposal for acquisition dated 27.01.2024, it was recorded as an agricultural land in the revenue records. We may also note that the land, subject matter of consideration in the present appeal, is Survey No.119P - 1/p-2 situated at Village Majadar, Taluka Rajula, District Amreli. The acquisition proceedings was for expanding National Highway No. 8E and with Page 2 of 5 Uploaded by MR. SAHIL SAMIULLA RANGER(HC01898) on Mon Feb 10 2025 Downloaded on : Mon Feb 10 21:24:06 IST 2025 NEUTRAL CITATION C/FA/3191/2024 ORDER DATED: 03/02/2025 undefined the notification dated 07.11.2014 under Section 3D of the Act' 1956, there cannot be a dispute that the land in question was vested with the Central Government absolutely free from all encumbrances. The right of the owner or the occupier of the land in question, thus, survived as an occupier till compensation was determined and deposited under Section 3H(1) and possession was taken by virtue of the provisions of Section 3E.
7. The award determining the compensation for the land in question was declared under Section 3G(1) as on 01.10.2016 computing the market value of the land in question treating it as an agricultural land. However, on an application filed by the land owners, in the proceedings under Section 3G(5), the Arbitrator had recomputed the market value by treating the land in question as non-agricultural land on the premise that there is an order dated 01.12.2014 of conversion of the land in question from agricultural to non-agricultural passed by the Collector.
8. The question before us as to whether the Collector was justified in exercising its power for conversion of the land in question from agricultural to non-agricultural after the land in question was vested with the Central Government absolutely free from all encumbrances, on issuance of the notification under the National Highways Act' 1956.
9. There is no dispute about the fact that though the application had been filed for conversion of the land in question prior to the proposal under Section 3A was published on 27.01.2014, but the same had not been decided till the publication of the notification under Section 3D dated 07.11.2014.
10. Considering the above, we find that with the vesting of the land in question with the Central Government by virtue of Section 3D(2), the Collector was denuded of its power to take any Page 3 of 5 Uploaded by MR. SAHIL SAMIULLA RANGER(HC01898) on Mon Feb 10 2025 Downloaded on : Mon Feb 10 21:24:06 IST 2025 NEUTRAL CITATION C/FA/3191/2024 ORDER DATED: 03/02/2025 undefined decision for conversion of the nature or usage of the land in question. The nature of the land in question stood locked on the date the declaration notification was issued under Section 3D Notification i.e. on 07.11.2014. The Collector being a custodian of the land situated within his jurisdiction was required to be alive of the situation that with the vesting of the land in question with the Central Government, his role remained that of only a custodian for the purpose of handing over the possession of the land to the acquiring body. In any case, he could not have exercised any power for dealing with the land in question. The order dated 01.12.2014 passed by the Collector for conversion of the nature of use of the land in question from agricultural to non-agricultural operation, therefore is, thus, liable to be ignored being wholly without jurisdiction.
11. With the above, we find that the Collector has committed a glaring illegality in computing the market value of the land in question treating it as a non-agricultural land, on the basis of the order dated 01.12.2014, which had been passed by him after vesting of the land in question with the Central Government.
12. In view of the above, we find that the Collector had passed the impugned award in complete derogation of the provisions of Section 3D and the scheme of the National Highways Act' 1956, which confer right on the National Highways Authority to enter into the land in question after vesting thereof in the Central Government under Section 3D, so as to carry out the building, maintenance, management or operation of the national highway.
13. Under the scheme of the Act, the only option left with the land owners was to pursue the matter for getting due compensation for the land in question.
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14. With the above, the patent illegality in the award dated 10.02.2021 passed by the Collector under Section 3G(5) is evident on the face of the record. The Principal Judge, Amreli has completely misdirected itself and committed a grave illegality in upholding the award of the learned Arbitrator and Collector, Amreli on the premise that the Court has no power to re-appreciate the evidence or to look to the merit of the award. No reappreciation is required to arrive at the above conclusion and no other alternative opinion is legally permissible.
15. For the patent illegality in making of the arbitral award on the part of the Collector under Section 3G(5), the Court was required to invoke its jurisdiction under Section 34 (2)(A), which clearly provides that the Court may set aside the award if it finds that the award is vitiat/ed by patent illegality appearing on the face of record.
16. With the above, while allowing the appeal, both the arbitral award dated 10.02.2021 in Arbitration Case No. 398 of 2021 and the order passed under Section 34 in Civil Misc. Application No. 33 of 2023 dated 03.08.2024 are hereby set aside. As a result, the appeal stands allowed. Consequently, the connected civil application stands disposed of.
(SUNITA AGARWAL, CJ ) (PRANAV TRIVEDI,J) S.S.RANGER Page 5 of 5 Uploaded by MR. SAHIL SAMIULLA RANGER(HC01898) on Mon Feb 10 2025 Downloaded on : Mon Feb 10 21:24:06 IST 2025