DIPANKAR SINGH & ORS. vs. UNION OF INDIA THROUGH: NATIONAL HIGHWAY AUTHORITY OF INDIA

* IN THE HIGH COURT OF DELHI AT NEW DELHI th % Date of decision: 15 November, 2019 + O.M.P.(I) 7/2019 + O.M.P.(I) 8/2019 + O.M.P.(I) 9/2019 + O.M.P. 18/2019 DIPANKAR SINGH & ORS. MEGHRAJ & ORS. SHIV KUMAR & ANR. SHIV KUMAR & ANR. ...... Petitioners Through: Mr. Randhir Singh Duhan, Adv. versus UNION OF INDIA THROUGH: NATIONAL HIGHWAY AUTHORITY OF INDIA ..... Respondent Through: Mr. Sumit Gupta and Ms. Aarushi Malik, Advs. CORAM: HON'BLE MR. JUSTICE V. KAMESWAR RAO V. KAMESWAR RAO, J. (ORAL) 1. These petitions have been filed by the petitioners under Section 9 and Section 34 of the Arbitration & Conciliation Act, 1996. Section 9 petitions being O.M.P.(I) 7/2019, O.M.P.(I) 8/2019 and O.M.P.(I) 9/2019. The common prayers made in the petitions filed under Section 9 of the Arbitration & Conciliation Act, 1996 are as under:- O.M.P.(I) 7/2019 and connected matter Page 1 of 22 ―PRAYER in O.M.P.(I) 7/2019 1. To direct the respondent No.1 National Highway Authority of India and its statutorily appointed officers (Arbitrator or CALA) to secure, grant and award the amount of compensation of the petitioners' land market value entitled for residential/ commercial nature as verified by the respondent themselves instead of agriculture nature. 2. To direct the respondent No.1 National Highway Authority of India and its statutorily appointed officers (Arbitrator or CALA) to secure grant and award the amount of compensation of the petitioners' assets (Shops, Hotels Residences) attached to their land to re- evaluate/ re-asses the value of the assets. 3. To direct the respondent No.1 National Highway Authority of India and its statutorily appointed officers (Arbitrator or CALA) to secure grant and award the amount of compensation of the petitioners' land and assets by making a correction of the award dated 06.06.2016 under Section 33 of the RFCTLARR Act and to award the unpaid amounts under Section 26 to 30 of the Act. 4. To direct the respondent No.1 National Highway Authority of India and its statutorily appointed officers (Arbitrator or CALA) to afford an opportunity of settlement, conciliation and negotiation with the respondents under the supervision of Arbitrator if the respondents wants to save their lapsed land acquisition proceedings and their awards. 5. To pass any other or further orders as this Hon'ble Court may deem fit and proper to be passed in present facts and circumstances of the case.‖ 2. Insofar as O.M.P. 18/2019 is concerned, the challenge in the petition is to the award of the learned Arbitrator dated June 13, 2019 O.M.P.(I) 7/2019 and connected matter Page 2 of 22 whereby the learned Arbitrator has dismissed the claims of the petitioners for enhanced compensation. 3. An issue of maintainability of these petitions in this Court has been raised by the counsel for the respondent on the ground that the Seat of the Arbitration was at Saharanpur; the lands acquired under the National Highway Act, 1956 („Act of 1956‟ in short) are situated in Saharanpur and the petitioners herein are residing at Saharanpur. 4. To understand the controversy, it is necessary to give in brief, the facts. The petitioners‟ lands were notified for acquisition in terms of Notification issued under Section 3 (D) of the Act of 1956 on November 1, 2013 for the purpose of construction and widening of the National Highway No. 73; the acquiring body being the National Highway Authority of India, Dehradun. After the acquisition, the competent authority under Section 3(G) of the Act of 1956 determined the amount payable as compensation to the petitioners / landowners. It appears that the petitioners were not satisfied with the amount paid as compensation and had accordingly made a claim before the Arbitrator, based in Saharanpur being DM Saharanpur appointed by the Central Government under sub-section 5 of Section 3(G) of the Act of 1956. As stated above, the Arbitrator dismissed the claims made by the petitioners herein. 5. The plea of the learned counsel for the petitioners on the maintainability of the petitions is primarily, that the lands of the petitioners are vested in the Central Government and possession thereof has been taken by the NHAI, being the executive agency of O.M.P.(I) 7/2019 and connected matter Page 3 of 22 the Central Government. The NHAI and the Central Government being positioned in New Delhi, this court shall have the jurisdiction to entertain these petitions. 6. On the other hand, learned counsel for the respondent states, as the claim of the petitioners is with regard to the compensation to be awarded to them on the acquisition of their lands which are situated outside the territorial jurisdiction of this court, i.e., in District Saharanpur and the Seat of Arbitration being at District Saharanpur, this court shall not have any jurisdiction to entertain these petitions. In support of his submissions, he would rely upon these judgments: 1. Indus Mobile Distribution Pvt. Ltd. v. Datawind Innovations Pvt. Ltd. and Ors. (2017) 7 SCC 678 2. Sundaram Finance Limited, rep. by the Assistant Manager (Legal), No.21, Patullos Road, Chennai – st 600002 v. M.K. Kurian, No.3, 1 Cross, Rainbow Nagar, Pondicherry and Anr. 2006 (1) CTC 433 3. Pacific Greens Infracon Pvt. Ltd. v. Senior Builders Ltd. 2009 SCC Online Del 862 4. Jatinder Nath v. Chopra Land Developers (P) Ltd. and Anr. (2007) 11 SCC 453 5. Harshad Chiman Lal Modi v. DLF Universal Ltd and Anr. (2005) 7 SCC 791 7. To answer the question as raised by the learned counsel for the respondent, it is necessary to highlight some of the provisions of the Act of 1956. The Act of 1956 is enacted specifically for the purpose of acquisition of lands for National Highways and for declaration of certain Highways as National Highways. Section 3A O.M.P.(I) 7/2019 and connected matter Page 4 of 22 of the Act of 1956 gives power to the Central Government to acquire lands for public purpose by complying with the procedure prescribed therein. Determination of amount of compensation payable for the lands acquired is dealt with in Section 3(G) of the Act of 1956. Section 3 (G)(1) provides that where land is acquired, the amount determined by an order of the competent authority, shall be paid. Section 3(G)(5) states, if the determination of the amount payable by the competent authority under Sub-Section-1 is not acceptable to either of the parties, the amount shall, on an application by either of the parties be determined by the Arbitrator to be appointed by the Central Government. Section 3(G)(6) provides that the subject to the provisions of the Act of 1956, the provisions of the Arbitration and Conciliation Act, 1996 shall apply to every arbitration under the Act of 1956. Sub-section 7 of Section 3(G) of the Act provides, for the matters that shall be taken into account by the competent authority or the Arbitrator for determining the amount under Sub-Section 1 or Sub-Section 5. For convenience, I shall reproduce here under the provisions of Section 3(G) of the Act of 1956: 3G. Determination of amount payable as compensation.— ( 1) Where any land is acquired under this Act, there shall be paid an amount which shall be determined by an order of the competent authority. (2) Where the right of user or any right in the nature of an easement on, any land is acquired under this Act, there shall be paid an amount to the owner and any other person whose right of enjoyment in that land has been affected in any manner whatsoever by reason of such acquisition an amount calculated at ten per cent, of the amount determined under sub-section (1), for that land. O.M.P.(I) 7/2019 and connected matter Page 5 of 22 (3) Before proceeding to determine the amount under sub- section (1) or sub-section (2), the competent authority shall give a public notice published in two local newspapers, one of which will be in a vernacular language inviting claims from all persons interested in the land to be acquired. (4) Such notice shall state the particulars of the land and shall require all persons interested in such land to appear in person or by an agent or by a legal practitioner referred to in sub- section (2) of section 3C, before the competent authority, at a time and place and to state the nature of their respective interest in such land. (5) If the amount determined by the competent authority under sub-section (1) or sub-section (2) is not acceptable to either of the parties, the amount shall, on an application by either of the parties, be determined by the arbitrator to be appointed by the Central Government. (6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act. (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. O.M.P.(I) 7/2019 and connected matter Page 6 of 22 8. From the above, it is noted that the Act of 1956 is a comprehensive code in itself and a special legislation enacted by the Parliament for acquisition and for determining compensation and its disbursement and if the compensation is not acceptable, for determination of enhancement by the Arbitrator. From a reading of sub-section (6) of Section 3(G) it is clear that there is a clear stipulation in the Act of 1956 that the provisions of Arbitration and Conciliation Act, 1996 shall apply to every arbitration under this Act. It is a conceded case of the petitioners that the Arbitration and Conciliation Act, 1996 shall be applicable against the award made by the Arbitrator. This I say so, because the very fact that the petitioners have filed a petitions under Sections 9 and 34 of the Arbitration and Conciliation Act, 1996 presupposes the same. So the question would arise whether this court is the ―court‖ where petitions under Sections 9 and 34 of the Arbitration and Conciliation Act, 1996 can be filed. The word “Court” has been defined in Section 2(1)(e) of the Arbitration and Conciliation Act, 1996, which reads as under: “2 (1) (e) ―Court‖ means— (i) in the case of an arbitration other than international commercial arbitration, the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject- matter of the arbitration if the same had been the subject- matter of a suit, but does not include any Civil Court of a grade inferior to such principal Civil Court, or any Court of Small Causes; O.M.P.(I) 7/2019 and connected matter Page 7 of 22 (ii) in the case of international commercial arbitration, the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, and in other cases, a High Court having jurisdiction to hear appeals from decrees of courts subordinate to that High Court; 9. In the case in hand, there is no dispute that the competent authority under Sections 3(G)(1) or 3(G)(5) of the Act of 1956 was the concerned Officer in the District Administration (Saharanpur). Similarly, the Arbitrator was the District Magistrate exercising Revenue Jurisdiction, i.e. the Collector of District Saharanpur. There is also no dispute that the proceedings were actually held before the said authorities in District Saharanpur. In the given background, I am of the view that the issue whether the petitions shall be maintainable in this court is no more res integra in view of the Judgment of the Supreme Court in the case of Indus Mobile Pvt.Ltd. (Supra) wherein the Supreme Court while referring to its earlier judgments was of the following view: ―9. The concept of juridical seat has been evolved by the courts in England and has now been firmly embedded in our jurisprudence. Thus, the Constitution Bench in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552, has adverted to ―seat‖ in some detail. Paragraph 96 is instructive and states as under:- ―96. Section 2(1)(e) of the Arbitration Act, 1996 reads as under: ―2. Definitions.—( 1) In this Part, unless the context otherwise requires— (a)-(d) * O.M.P.(I) 7/2019 and connected matter Page 8 of 22 (e) ‘Court’ means the Principal Civil Court of Original Jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such Principal Civil Court, or any Court of Small Causes;‖ We are of the opinion, the term ―subject-matter of the arbitration‖ cannot be confused with ―subject-matter of the suit‖. The term ―subject-matter‖ in Section 2(1)(e) is confined to Part I. It has a reference and connection with the process of dispute resolution. Its purpose is to identify the courts having supervisory control over the arbitration proceedings. Hence, it refers to a court which would essentially be a court of the seat of the arbitration process. In our opinion, the provision in Section 2(1)(e) has to be construed keeping in view the provisions in Section 20 which give recognition to party autonomy. Accepting the narrow construction as projected by the learned counsel for the appellants would, in fact, render Section 20 nugatory. In our view, the legislature has intentionally given jurisdiction to two courts i.e. the court which would have jurisdiction where the cause of action is located and the courts where the arbitration takes place. This was necessary as on many occasions the agreement may provide for a seat of arbitration at a place which would be neutral to both the parties. Therefore, the courts where the arbitration takes place would be required to exercise supervisory control over the arbitral process. For example, if the arbitration is held in Delhi, where neither of the parties are from Delhi, (Delhi having been chosen as a neutral place as between a party from Mumbai and the other from Kolkata) and the tribunal sitting in Delhi passes an interim order under Section 17 of the Arbitration Act, 1996, the appeal against such an interim order under Section 37 must lie to the courts of Delhi being the courts having supervisory jurisdiction over the arbitration proceedings and the tribunal. This would be irrespective of O.M.P.(I) 7/2019 and connected matter Page 9 of 22 the fact that the obligations to be performed under the contract were to be performed either at Mumbai or at Kolkata, and only arbitration is to take place in Delhi. In such circumstances, both the courts would have jurisdiction i.e. the court within whose jurisdiction the subject-matter of the suit is situated and the courts within the jurisdiction of which the dispute resolution i.e. arbitration is located.‖ (emphasis in original) 10. Paragraphs 98 to 100 have laid down the law as to ―seat‖ thus: (Bharat Aluminium case, SCC pp. 606-08) ―We now come to Section 20, which is as under: ―20. Place of arbitration. —(1) The parties are free to agree on the place of arbitration. (2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the Arbitral Tribunal having regard to the circumstances of the case, including the convenience of the parties. (3) Notwithstanding sub-section (1) or sub-section (2), the Arbitral Tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.‖ A plain reading of Section 20 leaves no room for doubt that where the place of arbitration is in India, the parties are free to agree to any ―place‖ or ―seat‖ within India, be it Delhi, Mumbai, etc. In the absence of the parties' agreement thereto, Section 20(2) authorises the tribunal to determine the place/seat of such arbitration. Section 20(3) enables the tribunal to meet at any place for conducting hearings at a place of convenience in matters such as consultations among its members for hearing witnesses, experts or the parties. O.M.P.(I) 7/2019 and connected matter Page 10 of 22 99. The fixation of the most convenient ―venue‖ is taken care of by Section 20(3). Section 20, has to be read in the context of Section 2(2), which places a threshold limitation on the applicability of Part I, where the place of arbitration is in India. Therefore, Section 20 would also not support the submission of the extra-territorial applicability of Part I, as canvassed by the learned counsel for the appellants, so far as purely domestic arbitration is concerned. 100. True, that in an international commercial arbitration, having a seat in India, hearings may be necessitated outside India. In such circumstances, the hearing of the arbitration will be conducted at the venue fixed by the parties, but it would not have the effect of changing the seat of arbitration which would remain in India. The legal position in this regard is summed up by Redfern and Hunter, The Law and Practice of International Commercial Arbitration (1986) at p. 69 in the following passage under the heading ―The Place of Arbitration‖: ―The preceding discussion has been on the basis that there is only one ‗place‘ of arbitration. This will be the place chosen by or on behalf of the parties; and it will be designated in the arbitration agreement or the terms of the reference or the minutes of proceedings or in some other way as the place or ‗seat‘ of the arbitration. This does not mean, however, that the Arbitral Tribunal must hold all its meetings or hearings at the place of arbitration. International commercial arbitration often involves people of many different nationalities, from many different countries. In these circumstances, it is by no means unusual for an Arbitral Tribunal to hold meetings—or even hearings—in a place other than the designated place of arbitration, either for its own convenience or for the convenience of the parties or their witnesses…. It may be more convenient for an Arbitral Tribunal sitting in one country to conduct a hearing in another country—for instance, for the purpose of taking evidence…. In such circumstances, O.M.P.(I) 7/2019 and connected matter Page 11 of 22 each move of the Arbitral Tribunal does not of itself mean that the seat of arbitration changes. The seat of the arbitration remains the place initially agreed by or on behalf of the parties.‖ This, in our view, is the correct depiction of the practical considerations and the distinction between ―seat‖ [Sections 20(1) and 20(2)] and ―venue‖ [Section 20(3)]. We may point out here that the distinction between ―seat‖ and ―venue‖ would be quite crucial in the event, the arbitration agreement designates a foreign country as the ―seat‖/―place‖ of the arbitration and also selects the Arbitration Act, 1996 as the curial law/law governing the arbitration proceedings. It would be a matter of construction of the individual agreement to decide whether: (i) the designated foreign ―seat‖ would be read as in fact only providing for a ―venue‖/―place‖ where the hearings would be held, in view of the choice of the Arbitration Act, 1996 as being the curial law, or (ii) the specific designation of a foreign seat, necessarily carrying with it the choice of that country's arbitration/curial law, would prevail over and subsume the conflicting selection choice by the parties of the Arbitration Act, 1996.‖ [emphasis in original] 10. In Para 11, the Supreme Court referred to Para 123 of Balco (supra) in the following manner: 11. In an instructive passage, this Court stated that an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause as follows: ―123Thus, it is clear that the regulation of conduct of arbitration and challenge to an award would have to be done by the courts of the country in which the arbitration is being conducted. Such a court is then the supervisory court possessed of the power to annul the award. This is O.M.P.(I) 7/2019 and connected matter Page 12 of 22 in keeping with the scheme of the international instruments, such as the Geneva Convention and the New York Convention as well as the Uncitral Model Law. It also recognises the territorial principle which gives effect to the sovereign right of a country to regulate, through its national courts, an adjudicatory duty being performed in its own country. By way of a comparative example, we may reiterate the observations made by the Court of Appeal, England in C v. D [2008 Bus LR 843 : 2007 EWCA Civ 1282 (CA)] wherein it is observed that: ―17.It follows from this that a choice of seat for the arbitration must be a choice of forum for remedies seeking to attack the award.‖ (emphasis supplied) In the aforesaid case, the Court of Appeal had approved the observations made in A v. B [(2007) 1 All ER (Comm) 591 : (2007) 1 Lloyd's Rep 237] wherein it is observed that: ―… an agreement as to the seat of an arbitration is analogous to an exclusive jurisdiction clause. Any claim for a remedy … as to the validity of an existing interim or final award is agreed to be made only in the courts of the place designated as the seat of arbitration.‖ (emphasis supplied) 11. Similarly, the court had also referred to its opinion in Reliance Industries Ltd. v. Union of India (2014) 7 SCC 603 to read Para 14 in the following manner: ― this statement of the law was echoed in several paragraphs. This judgment makes it clear that ―juridical seat‖ is nothing but the ―legal place‖ of arbitration. It was held that since the juridical seat or legal place of arbitration was London, English courts alone would have jurisdiction over the arbitration thus excluding Part I of O.M.P.(I) 7/2019 and connected matter Page 13 of 22

12. In Para 19 the Supreme Court on the basis that a particular place is designated as a Seat held as under:

13. From the reading of the aforesaid paras of the Judgments of the Supreme Court, the following position emerges:- O.M.P.(I) 7/2019 and connected matter Page 14 of 22 (i) Subject matter of Arbitration cannot be confused with the subject matter of suit. (ii) The purpose of Section 2(1)(e) has to be to identify the courts having supervisory control over arbitration proceedings. It refers to the court of the seat of arbitration process. (iii) Section 2(1)(e) has to be read with Section 20 which gives recognition to party autonomy. (iv) Legislature has intentionally given jurisdiction to two courts i.e.; (a) courts where cause of action has arisen, (b) courts where arbitration takes place. This was necessary as the agreement may provide for a seat which is neutral to both parties and the Courts are to exercise supervisory control over the arbitration process. (v) The moment the seat is designated, it is akin to an exclusive jurisdiction clause. 14. Having noted the position of law, this court is of the view that the parties having agreed to the Seat of Arbitrator to be at Saharanpur, it is the competent court under whose jurisdiction Saharanpur falls, which shall have the jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996. 15. During the course of hearing, learned counsel for the petitioners had filed three compilations consisting of judgments articles etc. in support of his submission. O.M.P.(I) 7/2019 and connected matter Page 15 of 22 16. The said material would not have any bearing in so far as the conclusion arrived at by this court on the aspect of jurisdiction. The reasoning of this court is given in a tabulated chart as made hereunder:

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17. In view of my above discussion, these petitions are not maintainable. The Registry of this court is directed to return the papers of these petitions to the petitioners to enable the petitioners invoke the jurisdiction of a competent court in accordance with law. 18. The petitions are dismissed. V. KAMESWAR RAO, J NOVEMBER 15, 2019 / jg/aky O.M.P.(I) 7/2019 and connected matter Page 22 of 22