Pending Arbitration Does Not Bar Eviction Proceedings Under West Bengal Public Land Act: Calcutta High Court

The Calcutta High Court has recently held that pending arbitration over a lease dispute does not by itself prevent public authorities from initiating eviction proceedings under the West Bengal Public Land (Eviction of Unauthorised Occupants) Act against an alleged unauthorised occupant of public land.

Justice Om Narayan Rai, however, set aside the impugned eviction notice after finding that the statutory authority had acted with a prejudged and influenced mind.

Explaining why the pending arbitration did not automatically bar the statutory proceedings, the Court said:

“The mere existence of that pending jurisdictional inquiry before the arbitrator does not strip the Collector of his separate statutory authority to issue a show-cause notice under Section 3 of the 1962 Act. In any case estoppel would apply only if the arbitral remedy would be validly available for resolution of the dispute in question.”

The dispute concerns the Rabindranath Thakur Diagnostic and Medical Care Centre in Murshidabad. Murshidabad Zilla Parishad had leased the facility to The Asia Health Care Development Private Limited in July 2004 for a period of 21 years. A supplementary agreement was executed in March 2005.

Asia Health Care claimed that after taking possession, it invested substantial sums in medical infrastructure. It also claimed to have installed high-tech equipment at the facility.

The Zilla Parishad terminated the lease in January 2022, accusing the company of defaulting on rent payments for four straight months. It asked Asia Health Care to vacate the premises.

Asia Health Care contested the termination, maintaining that it had already deposited the rent. It later approached the authorities seeking a fresh lease for a renewed term.

What followed was a series of legal battles across multiple forums, including writ proceedings, certificate recovery proceedings, a civil suit, and arbitration-related litigation.

In March 2025, a civil court refused the Zilla Parishad's request to send the dispute to arbitration. The Zilla Parishad then took the matter to a Division Bench of the High Court.

The Division Bench, in July 2025, reversed that decision and referred the dispute to arbitration. An arbitrator was appointed later that year in December. While doing so, the High Court left it open to the Zilla Parishad to argue that certain claims could not be decided in arbitration if they overlapped with the statutory eviction process.

Amid this, the Sub-Divisional Magistrate at Berhampore Sadar issued a notice on July 22, 2025, treating Asia Health Care as an unauthorised occupant of public land.

The company was asked to show cause why eviction proceedings should not continue.

Before the High Court, Asia Health Care argued that once the lease dispute had been referred to arbitration, parallel statutory eviction proceedings could not continue.

The company also argued that the eviction notice had been issued with a prejudged mind. It alleged that the statutory authority had acted under the dictates of the District Magistrate, making the process unfair.

Murshidabad Zilla Parishad and the State authorities opposed the plea. They argued that the public land eviction law created an independent statutory mechanism for recovering public property from unauthorised occupants.

They also argued that even if the contractual dispute over termination remained contested, the lease had independently expired on July 8, 2025 by efflux of time. According to them, this itself made the company an unauthorised occupant.

The High Court accepted that the statutory authority retained jurisdiction despite the pending arbitration.

The Court held that the pending arbitral proceedings concerned the parties' contractual disputes. The statutory mechanism, however, operated in a separate sphere concerning recovery of public land.

The Court, however, found the specific eviction notice unsustainable.

After comparing the notice with the prescribed statutory format, the Court found that the authority had effectively formed a view in favour of eviction before hearing the company's response.

Recording this finding, the Court observed, “The impugned show cause notice smacks of a prejudged notion.”

The Court also examined a later order passed in the same proceedings. That order recorded that the Collector was proceeding in compliance with the District Magistrate's instructions.

Justice Rai held that this showed the quasi-judicial authority was not acting independently.

On this aspect, the Court observed,

“Reading the impugned show cause notice in the light of the aforesaid order is also strongly indicative of the fact that the Collector is acting with an influenced mind. If a quasi-judicial proceeding is being conducted by a statutory authority then such authority is not supposed to be influenced by any instruction of its hierarchical higher ups regarding the conduct of such proceeding.”

Accordingly, the High Court set aside the July 22, 2025 show cause notice.

However, it granted liberty to the authorities to initiate fresh proceedings in accordance with law. It also clarified that its observations would not affect the merits of the parties' respective cases.

For Petitioner (The Asia Health Care Development Private Limited): Advocates Kumar Jyoti Tewari, Amrit Sinha, Aniruddha Tewari, Samriddhi Nayak.

For Respondent (Murshidabad Zilla Parishad): Advocates Sakya Sen, Sunil Gupta, Pallavi Chatterjee.

For Respondent (State of West Bengal): Advocates Supratim Dhar, Debottam Das.