Himachal Pradesh HC Rejects Landowners’ Bid to Extend Highway Compensation Arbitration After Unexplained 3-Year Delay

The applicants sought enhanced compensation for land acquired for the Solan–Shimla section of a National Highway.

After the competent authority assessed compensation, they applied for its redetermination under Section 3G(5) of the National Highways Act, 1956.

The Arbitrator closed the proceedings on 5 April 2023, holding that the arbitral mandate had terminated under Section 29A of the Arbitration and Conciliation Act, 1996.

On 3 August 2026, the applicants applied under Sections 29A(4) and (5) to extend the time for making the award.

They gave no explanation or supporting material for the delay of more than three years after the closure order.

Section 29A(1) prescribes the time for making an arbitral award; under Sections 29A(3) and (4), the parties may consent to a limited extension, and the Court may extend the time before or after expiry.

Under Section 29A(5), such an extension may be granted only on an application and for sufficient cause.

In Tata Sons Pvt. Ltd. v. Siva Industries and Holdings Ltd., 2023 (1) SCALE 793, the Supreme Court explained the statutory time limits and the consequences of expiry of the arbitral mandate.

In Rohan Builders (India) Private Limited v. Berger Paints India Limited, (2025) 10 SCC 802, the Supreme Court held that a post-expiry extension application is maintainable, but the Court must assess sufficient cause and may impose appropriate terms.

The judgment describes sufficient cause as a reason beyond the ordinary control of the litigant.

The Court accepted that Section 29A permits an extension application even after the prescribed period has expired, applying Rohan Builders.

However, maintainability did not entitle the applicants to an extension: they had filed more than three years after the Arbitrator’s order and had offered no explanation, particulars, or supporting documents for that delay.

The Court held that granting an extension on those facts would undermine Section 29A’s objective of expeditious resolution and would allow parties to seek extensions at their discretion, without establishing sufficient cause.

It dismissed the application under Sections 29A(4) and (5).