NHAI Cannot Take Technical Ground Against Landowners, Having Knowledge Of Arbitration Proceedings: Madras High Court
The Madras High Court has restored arbitral awards enhancing compensation for land acquired for a national highway, holding that the National Highways Authority of India (NHAI) could not rely on a technical objection over notice despite having knowledge of the arbitration proceedings.
The court questioned why NHAI had remained a “lame duck” despite knowing about the proceedings and held that a public authority could not take such a technical ground to deny landowners their rights under Article 300A of the Constitution.
Justice K. Kumaresh Babu, allowing appeals filed by the landowners, M. Jothi and Ambika, set aside the Principal District Judge, Villupuram's January 11, 2021 order and affirmed the arbitral awards enhancing their compensation.
The court observed, “Having knowledge of the said proceedings before the Arbitrator, taking a technical ground to deny the rights envisaged under Article 300 A that too by a public authority could not be appreciated. The 1st respondent had not explained as to why it has remained a lame duck after having knowledge of the proceedings.”
The dispute concerned land belonging to Jothi and Ambika that was acquired under the National Highways Act, 1956, at NHAI's request. The competent authority fixed compensation for the acquired land, but the landowners sought enhancement before the statutory arbitrator. The arbitrator subsequently passed awards increasing the compensation.
The Principal District Judge later set aside the awards on the ground that NHAI had not been given notice of the arbitration proceedings or an opportunity to participate.
The landowners challenged the decision. They argued that the Arbitrator had sent a hearing notice to NHAI and that, even if the notice issue was accepted, the matter should have been remitted to the Arbitrator rather than the awards being set aside.
NHAI maintained that no notice had been addressed to it and that only a copy of the proceedings had been marked to the authority. It argued that this could not be treated as notice of the arbitration.
The Special Government Pleader produced the dispatch register from the Arbitrator's office, which showed that notice of the proceedings had been dispatched to NHAI.
The high court noted that although NHAI claimed that only a copy of the proceedings had been marked to it, it “had not denied the receipt of such notice” dispatched by the Arbitrator's office. The court held that this meant NHAI had knowledge of the arbitration initiated by the landowners for enhancement of compensation.
The court also noted that the Principal District Judge had returned findings against NHAI on the merits but had set aside the awards on the notice issue. It held that the lower court had failed to appreciate that notice had been issued, even though it was marked as a copy to NHAI.
The high court accordingly set aside the January 11, 2021 order and affirmed the arbitral awards. It allowed both appeals, imposed no costs and closed the connected miscellaneous petitions.
For Appellants (M. Jothi and Tmt. Ambika): Advocate S. Ayyathurai.
For Respondents: Advocate Su. Srinivasan for NHAI; Government Pleader V. Prasad for the Competent Authority and Arbitrator.