Arbitrator Cannot Suo Moto Revive Disposed Proceedings or Base Compensation on Deleted Committee Guidelines

In brief

The question

1. Whether the Arbitrator had the jurisdiction to suo moto revive an arbitration case that had already been finaly disposed of on 18.04.2023.

The court held

The Court held that the order dated 25.10.2024 was illegal and passed in violation of natural justice, and that the Six-Man Committee's recommendation was void as the underlying authority (Clause 9) had been deleted by the State.

It also directed

The Court quashed the committee's report and the Arbitrator’s order dated 25.10.2024, and directed Respondent No. 4 (Competent Authority-cum-DLAO) to determine compensation afresh strictly in accordance with law within three months, after providing the petitioner an opportunity to be heard.

01Facts

The petitioner’s land was acquired for the widening of National Highway-80.

¶ 4

Dissatisfied with the compensation, the petitioner initiated Arbitration Case No. 05/2021 before the Divisional Commissioner, Munger.

¶ 4

On 18.04.2023, the Arbitrator set aside the compensation determined by the Competent Authority and directed a fresh decision.

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Subsequently, a "Six-Man Committee" issued an assessment report on 15.03.2024 based on old drone maps and photographs.

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Despite the case being previously disposed of, the Arbitrator suo moto revived the matter and passed a final order on 25.10.2024, confirming the committee's report and directing payment.

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The petitioner challenged these proceedings, alleging they were conducted without notice and in violation of statutory procedures.

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02Issues

i.1. Whether the Arbitrator had the jurisdiction to suo moto revive an arbitration case that had already been finaly disposed of on 18.04.2023.

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ii.2. Whether the reliance on a "Six-Man Committee" for determining compensation was legally valid in light of subsequent departmental circulars and the National Highways Act.

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iii.3. Whether the order dated 25.10.2024 violated the principles of natural justice by allegedly recording the petitioner's presence while proceeding behind his back.

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03Law Applied

The court applied Section 26 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which mandates specific criteria for determining market value.

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Section 3G of the National Highways Act, 1956, which outlines the procedure for determination of compensation and the role of the Arbitrator.

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Letter No. 162 dated 11.02.2021 issued by the Revenue and Land Reforms Department, Bihar, which deleted "Clause 9" and expressly prohibited the use of a "Six-Man Committee" for compensation assessment.

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Provisions in the judgment · 3 · Linked ones open on LawLens

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 Section 2 Section 11 Section 26

04Reasoning

The Court found that the Arbitrator acted beyond his jurisdiction by reviving a concluded case without a fresh application or statutory authority.

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Upon perusing the original records, the Court observed that while the Arbitrator recorded the petitioner’s presence in the orders dated 24.10.2024 and 25.10.2024, the case file contained no appearance Slips, notice service reports, or pleadings to support such presence, indicating the order was passed behind the petitioner's back.

¶ 24, 30

The Court noted that the Arbitrator bypassed mandatory procedures under Section 26 of the 2013 Act and Section 3G of the 1956 Act by relying on a "Six-Man Committee".

¶ 29

This reliance was found to be in direct defiance of the Revenue Department's 2021 circular which had specifically abolished such committees to prevent administrative hierarchies from being subverted.

¶ 12, 34