National Highways Authority Of India vs Sri Abdul Gafoor Kotekar
2024 Latest Caselaw 28022 Kant

Karnataka High Court

National Highways Authority Of India vs Sri Abdul Gafoor Kotekar on 23 November, 2024

Author: H.P.Sandesh

Bench: H.P.Sandesh

                            1



       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 23RD DAY OF NOVEMBER, 2024      R
                         BEFORE

           THE HON'BLE MR. JUSTICE H.P. SANDESH

                 M.F.A. NO.2859/2024 (AA)
BETWEEN:

NATIONAL HIGHWAYS AUTHORITY OF INDIA
PROJECT IMPLEMENTATION UNIT-MANGALORE
DOOR NO.3-29, "BETHEL", THARETHOTA,
NEAR PUMPWELL (NH-66),
MANGALORE - 575 002
REP. BY ITS THE PROJECT DIRECTOR.
                                              ... APPELLANT

          (BY SRI PRAKASHA V. ANGADI, ADVOCATE)
AND:

1.     SRI. ABDUL GAFOOR KOTEKAR
       S/O HAJI SHEIK HUSSAIN SAHEB
       R/AT FLAT NO.703, ORCHARD APARTMENTS
       ARYA SAMAJ ROAD, BALMATTA,
       MANGALURU.

2.     THE ARBITRATOR AND DEPUTY COMMISSIONER
       D.K. DISTRICT, MANGALORE-575 001.

3.     THE SPECIAL LAND ACQUISITION OFFICER
       AND COMPETENT AUTHORITY,
       NHAI, N.G.O.S BUILDING
       MINI VIDHANA SOUDHA COMPOUND
       MANGALURU-575 001.                 ... RESPONDENTS

        (BY SRI VISHWAJITH RAI M., ADVOCATE FOR R1;
       SRI GOPAL KRISHNA SOODI, AGA FOR R2 AND R3)
                                      2




     THIS M.F.A. IS FILED UNDER SECTION 37(1)(c) OF THE
ARBITRATION AND CONCILIATION ACT, 1996, AGAINST THE
JUDGMENT DATED 06.01.2024 PASSED IN A.P.NO.89/2022 ON
THE FILE OF THE I ADDITIONAL DISTRICT AND SESSIONS
JUDGE, MANGALURU, DISMISSING THE PETITION FILED U/S.34
OF ARBITRATION AND CONCILIATION ACT R/W ORDER 7 RULE 1
OF CPC AND ETC.

    THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT   ON   08.11.2024 THIS  DAY,  THE   COURT
PRONOUNCED THE FOLLOWING:

CORAM:       HON'BLE MR JUSTICE H.P.SANDESH

                           CAV JUDGMENT

This miscellaneous first appeal is filed challenging the

order dated 06.01.2024 passed in A.P.No.89/2022 by the I

Additional District and Sessions Judge, Mangaluru and

consequently set aside the arbitral award passed in

No.C.DIS.ARB(2). NH.LAQ.CR - 127/2017-18 DATED 19.04.2022

passed by respondent No.2 for enhancing the compensation at

the rate of Rs.1,28,800/- per cent.

2. Heard the learned counsel appearing for

therespective parties.

3. The factual matrix of the case is that a notification

came to be issued for acquiring the land for the purpose of

widening of National Highway No.66 at Kotekar village under

Section 3A(1) of the National Highways Act (for short 'NH Act')

on 08.02.2010 and the Special Land Acquisition Officer passed

the award determining the compensation in respect of the land

bearing Sy.No.24/5B measuring 546.34 square meters

residential converted land situated in Kotekar village, Mangaluru

taluk for which compensation was determined at Rs.1,00,000/-

per cent considering the same as dry land. The respondent

herein filed a petition under Section 3G(5) of the NH Act to the

Deputy Commissioner, D.K., Mangaluru being aggrieved by the

determination of compensation of Rs.1,00,000/- per cent.

Respondent No.2 i.e., the Arbitrator-cum-Deputy Commissioner

of D.K., Mangaluru, vide order dated 19.04.2022, determined

the compensation as Rs.1,28,800/- per cent considering the land

as residential in nature with 9% interest as applicable under

Section 3H(5) of the NH Act and with all benefits admissible

under the provisions of RFCTLARR Act, 2013. The appellant

herein has filed the Arbitration Petition before the I Additional

District and Sessions Judge, Mangaluru challenging the arbitral

award passed by respondent No.3 and the District and Sessions

Judge, dismissed the said petition vide order dated 06.01.2024.

Being aggrieved by the said order, the present appeal is filed

before this Court.

4. The learned counsel for the appellant would

vehemently contend that inspite of the award has been passed

considering the material available on record, Arbitrator has

committed an error in enhancing the compensation from

Rs.1,00,000/- per cent to Rs.1,28,800/- per cent holding that

the land acquired has good potential for future development and

the said approach is erroneous. It is also contend that the

Arbitrator under the provisions of Arbitration and Conciliation Act

is required to exercise the powers as conferred under Section

3G(7) of the NH Act, 1956 and extracted the said provisions. It

is also contend that the competent authority by considering the

relevant material passed the well reasoned award on 17.08.2011

which does not call for interference. The District Judge has erred

in not taking note of the said provision. The Arbitrator has also

misinterpreting the judgment passed by the Apex Court and the

ordinance/notification issued by the Government of India

No.S.O.2368(E) dated 28.08.2015 by which the provisions of

RFCTLARR Act, 2013 are made applicable with effect from

01.01.2015 as such the Arbitrator has passed the impugned

award enhancing the compensation by making the provisions of

said Act retrospectively to the land acquired without jurisdiction

and authority of law.

5. The counsel also would vehemently contend that the

land was acquired by the SLAO and CA as per notification dated

08.02.2010 which was published under Section 3A of the NH Act

and award was passed on 17.08.2011 by following the provisions

of the NH Act. However, the Arbitrator passed an impugned

award enhancing compensation by directing the respondent to

recalculate the compensation under the provisions of RFCTLARR

Act, 2013 which came into force with effect from 01.01.2015 and

the Government of India issued notification that the provisions of

Schedule - I, II and III of RFCTLARR Act are made applicable

with effect from 01.01.2015 and passed the impugned order

directing to recalculate the compensation and pay all the

admissible benefits under the said Act and hence, Arbitrator

committed an error in passing such an order and ought not to

have invoke the provisions of RFCTLARR Act. The counsel for the

appellant also would vehemently contend that the Arbitrator has

failed to give reasons as held by the Apex Court that a quasi-

judicial authority is required to assign reasons for passing the

order and the very approach of the Arbitrator is erroneous and

no reasons are assigned and Arbitrator has lost sight of the fact

that compensation amount already paid and determined under

Section 3H(5) of the National Highways Act, 1956.

6. The District Judge also when the said grounds has

been raised, also failed to consider the material available on

record and committed an error in accepting the reasons of the

Arbitrator and also the scope of Section 34(2) of the Act and the

power exercised by the Arbitrator is against the provisions of the

Arbitration and Conciliation Act. The counsel also would

vehemently contend that Section 3(J) is clear that the new

enactment is not applicable for National Highways Act and

Section 3(J) excluding applicability of Land Acquisition Act, 1894

resulting in non-grant of solatium and interest in respect of lands

acquired under the NH Act. Inspite of it, the District Judge

committed an error and misunderstood the judgment of the

Apex Court. Hence, it requires interference of this Court.

7. The learned counsel for the respondent in his

arguments would vehemently contend that, the Trial Court has

not committed an error in dismissing the application filed under

Section 34 of the Arbitration and Conciliation Act and explanation

to Section 34 is very clear that for the avoidance of doubt, the

test as to whether there is a contravention with the fundamental

policy of Indian law shall not entail a review on the merits of the

dispute. The counsel would vehemently contend that though

properties were acquire in the year 2010, award was passed in

the year 2011 and it is a continuous proceedings and arbitration

petition was disposed of in the year 2022. The District Judge

also taken note of the judgment of the Apex Court and also

taken note of the notification of the Union of India and opined

that only compensation was paid in part, not entire

compensation and hence, rightly comes to the conclusion that

new enactment of 2013 is applicable to the case on hand. The

counsel in support of his arguments relied upon the judgment of

the Apex Court reported in (2019) 9 SCC 304 in the case of

UNION OF INDIA AND ANOTHER vs TARSEM SINGH AND

OTHERS. The counsel referring this judgment would contend

that Apex Court, in this judgment held that Section 3-J excluding

applicability of LA Act, 1894 resulting in non-grant of solatium

and interest in respect of lands acquired under National

Highways Act, which were available if lands were acquired under

Land Acquisition Act, held, violative of Article 14 of the

Constitution of India and the impugned judgment of the High

Court affirmed.

8. The counsel also brought to notice of this Court

paragraph 13 of the said judgment wherein a discussion was

made with regard to Fourth Schedule of the New Act to be read

along with Section 105 expressly includes under item 7, the

National Highways Act, 1956. In item 9, this schedule also

includes the Requisitioning and Acquisition of Immovable

Property Act, 1952. By a Notification dated 28.08.2015 issued

under Section 105 read with Section 113 of the 2013 Act, it is

provided that the 2013 Act compensation provisions will apply to

acquisitions that take place under the National Highways Act.

The result is that both before the 1997 Amendment Act and after

the coming into force of the 2013 Act, soltium and interest is

payable to landowners whose property is compulsorily acquired

for the purposes of National Highways. The counsel also brought

to notice of this Court a details discussion made by the Apex

Court in the aforesaid judgment particularly brought to notice of

this Court paragraph 48 of the judgment wherein also discussion

was made with regard to ordinance as well as the notification

have applied the principle contained in Nagpur Improvement

Trust'scase reported in (1973) 1 SCC 500 and as the Central

Government has considered it necessary to extend the benefits

available to landowners generally under the 2013 Act to similarly

placed landowners whose lands are acquired under the 13

enactments specified in the Fourth Schedule, the National

Highways Act being one of the aforesaid enactments. The

counsel also brought to notice of this Court paragraph 52 of the

said judgment wherein it is held that Section 3-J is, to this

extent, violative of Article 14 of the Constitution of India and,

therefore, declared to be unconstitutional. The counsel referring

this judgment would vehemently contend that contention of the

appellant counsel that Section 3-J is clear that same is not

applicable cannot be accepted.

9. Having heard the learned counsel appearing for the

respective parties and also the grounds which have been urged

in this appeal and the principles laid down in the judgment

referred supra, the point that would arise for the consideration of

this Court are:

1. Whether the I Additional District and Sessions Judge committed an error in confirming the order passed by the Arbitrator in applying the provisions of RFCTLARR Act, 2013 in awarding the compensation?

2. What order?

Point No.1:

10. Having heard the learned counsel appearing for the

respective parties and also on perusal of the material available

on record, it is not in dispute that National Highways has issued

notification on 08.02.2010 for acquiring the property of the

respondent. It is also not in dispute that the Land Acquisition

Officer has passed the award determining the compensation in

respect of the subject matter of the acquired land determining

the compensation as Rs.1,00,000/- per cent. The Arbitrator

revised the same enhancing to Rs.1,28,800/- per cent. The

contention of the appellant that the Arbitrator committed an

error in enhancing the compensation and fails to take note of

Section 3G(7) of the NH Act that the Arbitrator while

determining the amount under sub-section (1) or sub-section

(5), shall take into consideration the market value of the land on

the date of publication of the notification under Section 3A and

also 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 and the competent authority considered the above

relevant material while passing the award on 17.08.2011. It has

to be noted that the District Judge, while considering the

material available on record taken note of the fact held that the

land acquired was converted land and the same was converted

for non-agricultural purpose that is for residential purpose and

while determining the compensation by Special Land Acquisition

Officer taken note of the fact that it is a dry agricultural land and

the same is erroneous. The District Judge also while considering

the material available on record taken note of Section 3G(7) of

the NH Act in paragraph 24 and also taken note of various

factors and law and calculation for compensation made by the

authority has been rectified by the Arbitrator and the same is

observed in paragraph 25. In paragraph 26 also discussed in

detail regarding passing of an order by the Arbitrator that is in

respect of awarding of compensation.

11. The other contention of the appellant's counsel is

that the provisions of RFCTLARR Act, 2013 would not apply to

the acquisition in question and Arbitrator ought not to have

invoked the same and District Judge also taken note of the fact

that Land Acquisition Act, 1894 was repealed and new

enactment brought in the year 2013 and came into force on

01.01.2014 and the object for bringing new enactment was also

discussed in paragraph 28 and also discussed Section 26 of the

2013 Act criteria to be adopted for assessing the market value

which has been dealt in paragraph 29. In paragraph 31 also

taken note of Section 105(1) of the 2013 Act wherein a provision

is made that provisions of 2013 Act shall not apply to the

enactment specified in Fourth Schedule subject to the provisions

of sub-section (3) of Section 105. The District Judge also taken

note that the National Highways Act, 1956 finds mention in

Fourth Schedule and also observation is made that under sub-

section (3) of Section 105 within one year from the date of

commencement of the 2013 Act, the Central Government by a

notification could make applicable the beneficial provisions of the

2013 Act with regard to determination of compensation in

accordance with First, Second and Third Schedule to the

enactment specified in Fourth Schedule and comes to the

conclusion that the application of new Act shall be made with

exceptions or modification that it may not result in reduction of

compensation or dilution of the provisions of the 2013 Act. The

District Judge also in detail discussed Ordinance No.9 of 2013

Act was promulgated on 31.12.2014 extending the provisions of

the 2013 Act to the cases of land acquisition under the

enactments specific in Fourth Schedule to the 2013 Act. To give

continuity, Ordinance No.4 of 2015 dated 03.04.2015 and

Ordinance No.5 of 2015 dated 30.05.2015 were promulgated.

Ordinance No.5 of 2015 lapsed on 31.08.2015. The order dated

28.08.2015 was issued by the Central Government exercising

power under Section 113 of 2013 Act. The order came into

effect from 01.09.2015. The Central Government extended the

benefit of 2013 Act with regard to determination of

compensation, rehabilitation and settlement to the land acquired

under enactment mentioned in Fourth Schedule to 2013 Act.

The object of this was to extent the benefit of the 2013 Act

uniformly to the land acquired under the enactments in Fourth

Schedule of 2013 Act. It is also very clear that ordinances are

issued only with an intention to clarify the confusion created by

the circulars. It was clarified by the comprehensive guidelines

that Section 24 of the 2013 Act is not applicable to the

acquisition under the National Highways Act. Clause 4.6 (i) and

(ii) elucidated that the relevant date for determination of the

market value is the date on which notification under Section 3A

of 1956 Act was published. Sub-clause (iii) of clause 4.6 deals

with applicability of First, Second and Third Schedule appended

to the 2013 Act. Sub-clause 4.6(iii) has three clauses. Clause

(a) provides two instances in which compensation is to be paid in

accordance with First Schedule to the 2013 Act. In all cases

where award was not announced under Section 3G of 1956 Act

till 31.12.2014 or where the award is announced but

compensation not paid as on 31.12.2014 in respect of majority

of land holding under acquisition. Sub-clause (b) deals with

cases where the award under Section 3G of 1956 Act was

announced before 01.01.2015 but the full amount of award was

not deposited by the acquisition agency with CALA. In such

cases also, the compensation is to be determined in accordance

with First Schedule with effect from 01.01.2015. As per sub-

clause (c) where the process of land acquisition is deemed to be

complete and settled, such cases are not to be reopened. The

pre-requisites under sub-clause (c) are that on or before

31.12.2014 the award under Section 3G of 1956 Act was

announced by CALA, the amount deposited by the acquiring

agency CALA and compensation paid to the land owners in

respect of majority of land holdings under acquisition. The

District Judge also while considering the applicability of new

enactment also discussed in detail and in view of clause-

4.6(iii)(a) of the guidelines issued by the Ministry of Road

Transport and Highways dated 28.12.2017, if award had been

announced but compensation had not been paid in respect of

majority of the land holdings under acquisition as on

31.12.2014, the compensation would be payable in accordance

with First Schedule of the RFCTLARR Act 2013.

12. The District Judge having taken note of these

aspects and also taken note of the case on hand held that land

was acquired in the year 2010 but award was passed in the year

2011 and also not stated by the appellant that on what date,

they made the compensation and the National Highway Authority

is in possession of all documents pertaining to acquisition. When

they have not produced the documents for having paid the

compensation in entirety and also they did not take up the

specific contention that the amount has been paid, the authority

was directed to furnish the date of payment, but they did not

provide the same. Hence, invoked Section 114(g) of the Indian

Evidence Act and is not produced, would, if produced, be

unfavourable to the person who withholds it. Having taken note

of the said fact in consideration comes to the conclusion that

RFCTLARR Act are applicable to the case on hand. In the case

on hand also appellant has not placed any documents before this

Court, even for having paid the entire compensation.

13. It is also important to note that the District Judge

also while passing an order taken note of the decision reported

in (2019) 9 SCC 304 in the case of UNION OF INDIA vs

TARSEM SINGH AND OTEHRS and particularly taken note of

paragraphs 40 and 41 regarding invoking of new enactment.

14. The counsel for the respondent also brought to

notice of this Court paragraph 13 of the judgment which reads

as follows:

"13. The First Schedule to the said Act provides that solatium equivalent to 100% of the market value multiplied by various factors, depending on whether the land is situated in a rural or urban area, constitutes minimum compensation package to be

given to those whose land is acquired. The Fourth Schedule to this Act, to be read along with Section 105, expressly includes under Item 7, the National Highways Act, 1956. In Item 9, this Schedule also includes the Requisitioning and Acquisition of Immovable Property Act, 1952. By a Notification dated 28-8-2015 issued under Section 105 read with Section 113 of the 2013 Act, it is provided that the 2013 Act compensation provisions will apply to acquisitions that take place under the National Highways Act. The result is that both before the 1997 Amendment Act and after the coming into force of the 2013 Act, solatium and interest is payable to landowners whose property is compulsorily acquired for purposes of National Highways. This is one other very important circumstance to be borne in mind when judging the constitutional validity of the 1997 Amendment Act for the interregnum period from 1997 to 2015."

(emphasis supplied)

15. Having read this paragraph 13, it is very clear that

the Apex Court discussed the provision of Section 105 as well as

taken note of Fourth Schedule to the Act and item 9 of the

Schedule also includes the Requisitioning and Acquisition of

Immovable Property Act, 1952 so also inclusion of National

Highways Act. Hence, it is clear that the National Highways

Authority also included if any acquisition is made.

16. The Apex Court also in detail discussed with regard

to Article 14 of the Constitution of India that there cannot be any

discrimination and discussed in paragraph 25 and 26 and also

even discussed the judgment of Nagpur Improvement Trust's

case referred supra regarding discrimination is concerned and

comes to the conclusion that if any acquisition, there cannot be

any discrimination. The counsel for the respondent also brought

to notice of this Court paragraph 48 of the said judgment

wherein once again the judgment of Nagpur Improvement

Trust's case was discussed in detail and held that new

enactment as well as the Central Government also issued the

notification to extend the benefits available to the landowners

generally under 2013 Act similarly, whose lands are acquired

under 2013 enactment specified in the Fourth Schedule and also

an observation is made that NH Act being one of aforesaid

enactments and also observation is made that this being the

case it is clear that the Government has itself accepted that the

principle of Nagpur Improvement Trust's case would apply to

acquisitions which take place under the National Highways Act

and that solatium and interest would be payable under the 2013

Act to persons whose lands are acquired for the purpose of

National Highways as they are similarly placed to those

landowners whose lands have been acquired for other public

purposes under the 2013 Act.

17. This Court would like to extract the very paragraph

48 of the said judgment which reads as follows:

"48. It is thus clear that the Ordinance as well as the notification have applied the principle contained in Nagpur Improvement Trust v. Vithal Rao, (1973) 1 SCC 500, as the Central Government has considered it necessary to extend the benefits available to landowners generally under the 2013 Act to similarly placed landowners whose lands are acquired under the 13 enactments specified in the Fourth Schedule, the National Highways Act being one of the aforesaid enactments. This being the case, it is clear that the Government has itself accepted that the principle of Nagpur Improvement Trust would apply to

acquisitions which take place under the National Highways Act, and that solatium and interest would be payable under the 2013 Act to persons whose lands are acquired for the purpose of National Highways as they are similarly placed to those landowners whose lands have been acquired for other public purposes under the 2013 Act. This being the case, it is clear that even the Government is of the view that it is not possible to discriminate between landowners covered by the 2013 Act and landowners covered by the National Highways Act, when it comes to compensation to be paid for lands acquired under either of the enactments. The judgments delivered under the 1952 Act as well as the Defence of India Act, 1971, may, therefore, require a re-look in the light of this development. [The Defence of India Act, 1971, was a temporary statute which remained in force only during the period of operation of a proclamation of emergency and for a period of six months thereafter -- vide Section 1(3) of the Act. As this Act has since expired, it is not included in the Fourth Schedule of the 2013 Act.] In any case, as has been pointed out hereinabove, Union of India v. Chajju Ram, (2003) 5 SCC 568, has been referred to a larger Bench. In this view of the matter, we are of the view that the view

of the Punjab and Haryana High Court in Union of India v. Tarsem Singh, 2018 SCC OnLine P&H 6036, in Jang Bahadur v. Union of India, 2018 SCC OnLine P&H 6034, in Union of India v. Abhinav Cotspin Ltd., 2016 SCC OnLine P&H 19319 is correct, whereas the view of the Rajasthan High Court in Banshilal Samariya v. Union of India, 2005 SCC OnLine Raj 572 : 2005-06 Supp RLW 559 is not correct."

(emphasis supplied)

18. Having considered the discussions made in

paragraph 48, an observation is made that this being the case, it

is clear that even the Government is of the view that it is not

possible to discriminate between landowners covered by the

2013 Act and landowners covered by the National Highways Act,

when it comes to compensation to be paid for lands acquired

under either of the enactments.

19. It is also brought to notice of this Court that the

Apex Court held that provisions of Section 3J is violative of

Article 14 of the Constitution of India and therefore, declared to

be unconstitutional. Having considered the principles laid down

in the judgment referred supra and also discussions made in the

judgment and also the contentions, the very contention of the

counsel for the appellant that the Arbitrator committed an error

in invoking new enactment of 2013 Act AND same is not

applicable cannot be accepted and in detail District Judge while

considering the application filed under Section 34 of the

Arbitration and Conciliation Act discussed the same elaborately

and rightly comes to the conclusion that the same is applicable.

The very contention that discussion made in paragraph 36 of the

judgment is not correct cannot be accepted and rightly comes to

the conclusion that the same is also applicable.

20. The other contention of the counsel for the appellant

that Section 3J is clear not applicable also cannot be accepted

and the very contention that even District Judge also

misunderstood the judgment is also cannot be accepted and

even the Apex Court in the said judgment categorically held that

excluding applicability of LA Act, 1894 resulting in non-grant of

solatium and interest in respect of lands acquired under National

Highways Act, which were available if lands were acquired under

Land Acquisition Act, held, violative of Article 14 of the

Constitution of India. When clear discussion was made with

regard to Fourth Schedule and each Schedule of the new

enactment and also a clear discussion was made with regard to

the guidelines as well as notifications and also the Union of India

issued the notification and even discussion was made that

Government also did not oppose the same in the judgment

referred supra and the District Judge also in paragraph 34 in

keeping the ordinance as well as Section 105(1) of the 2013 Act

held that in the absence of any material for having paid the

entire compensation and also it is a continuous process of

determination of the compensation and the matter was also

referred to the Arbitrator-cum-Deputy Commissioner who has

been arrayed as respondentNo.2 in the A.P.No.81/2022 and

award was also passed on 19.04.2022 subsequently to the new

enactment and new enactment is applicable and the very

contention of the appellant's counsel that award passed in the

year 2011 itself and cannot invoke new enactment cannot be

accepted. Hence, I do not find any merit in the appeal.

Accordingly, the point No.1 is answered as negative.

Point No.2:

21. In view of the discussions made above, I pass the

following:

ORDER

The miscellaneous first appeal is dismissed.

Sd/-

(H.P. SANDESH) JUDGE

SN