National Highways Authority Of India vs M/S. Marine Container
2025 Latest Caselaw 2611 Guj

Gujarat High Court

National Highways Authority Of India vs M/S. Marine Container on 3 February, 2025

Author: Sunita Agarwal

Bench: Sunita Agarwal

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                              C/FA/3198/2024                                      ORDER DATED: 03/02/2025

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                             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                           R/FIRST APPEAL NO. 3198 of 2024
                                                     With
                                 CIVIL APPLICATION (FOR STAY) NO. 1 of 2024
                                      In R/FIRST APPEAL NO. 3198 of 2024
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                                     NATIONAL HIGHWAYS AUTHORITY OF INDIA
                                                     Versus
                                         M/S. MARINE CONTAINER & ORS.
                      =============================================
                      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
                      =============================================
                        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 issues 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/3198/2024                                      ORDER DATED: 03/02/2025

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4. This appeal is directed against the judgment and 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 only issue raised by the learned counsel for the respondent in the present appeal defending the award passed by the Arbitrator and the order passed by the Court under Section 34 of the Arbitration and Conciliation Act' 1996 (for short, "the Act' 1996"), is that the land in question had been shown as non- agricultural land in the notifications issued under Section 3A and 3D of the National Highways Act' 1956 (for short, "the Act' 1956").

6. However, the facts remains that on the date of vesting of the land in question, i.e. 07.11.2014 with the issuance of notification under Section 3D with the Central Government, the Collector had no jurisdiction to make any conversion of the nature or usage of the land in question.

7. It is an admitted fact of the matter that the land in question has been converted for usage from agricultural to non- agricultural operations by virtue of the order dated 11.12.2014, after about a period of one month when the vesting of the land in the question with the Central Government was completed with the issuance of the notification under Section 3D of the Act' 1956.

8. 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 transpired that the learned

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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.

9. 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.

10. It is an admitted fact of the matter that the land in question was an agricultural land and on the date of notification under Section 3A, the proposal for acquisition dated 27.01.2024, it was recorded as 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 said acquisition was for expanding National Highway No. 8E and with 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, remained that of occupier till compensation was determined and deposited under Section 3H(1) and possession was taken by virtue of the provisions of Section 3E.

11. 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 as an agricultural land. However, on an application filed by the land

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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 of conversion of the land in question from agricultural to non- agricultural passed by the Collector dated 01.12.2014.

12. 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.

13. 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.

14. 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 decision for conversion of the nature of the land in question. The nature of the land in question was locked on the date when declaration notification under Section 3D was issued, i.e. on 07.11.2014. The Collector being the 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, he remained only a custodian to facilitate transfer of possession to the acquiring body and could not have exercised any power for changing the nature of the land in question. The order dated 01.12.2014 passed by the Collector for conversion of the nature or usage of the land in question from agricultural to non-

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agricultural operation, therefore, is liable to be ignored.

15. 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, by virtue of the order dated 01.12.2014, which had been passed after vesting of the land in question with the Central Government.

16. In view of the above, we find that the Collector had passed the award in utter 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.

17. With the above scheme of the Act, the only option left with the land owners was to pursue his claim for getting due compensation of the land in question.

18. 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 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 re-appreciation of evidence is required to arrive at the above conclusion and no alternative opinion is legally permissible.

19. 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

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clearly provides that the Court may set aside the award if it finds that the award is vitiated by patent illegality appearing on the face of record.

20. 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