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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C/FA/3191/2024 ORDER DATED: 03/02/2025
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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
NEUTRAL CITATION
C/FA/3191/2024 ORDER DATED: 03/02/2025
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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
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C/FA/3191/2024 ORDER DATED: 03/02/2025
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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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C/FA/3191/2024 ORDER DATED: 03/02/2025
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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
