Commercial Court Cannot Hear Challenge To Railways Land Acquisition Award: Chhattisgarh High Court

On 14 May, the Chhattisgarh High Court held that disputes arising from land acquisition proceedings under the Railways Act do not fall within the definition of a “commercial dispute” under Section 2(1)(c) of the Commercial Courts Act, 2015, and therefore cannot be adjudicated by a Commercial Court.

A Division Bench of Justices Parth Prateem Sahu and Sachin Singh Rajput allowed an appeal filed by Sagarmal Agrawal, set aside an order of the Commercial Court, Bilaspur, holding that it lacked jurisdiction to entertain a challenge to an arbitral award arising out of land acquisition proceedings. The judges held:

“Since the 2nd District Judge (Commercial Court), District Judge Level District Bilaspur (C.G.) is having no jurisdiction to entertain the application under Section 34 of the Act of 1996 arising out of the land acquisition proceedings being not covered under commercial dispute as defined under Section 2 (c) of the Act of 2015, the Commercial Court erred in entertaining the proceeding filed by the appellant before it.”

Sagarmal Agrawal owned land in Village Mohanpur in Korba district. Indian Railways acquired a portion of the land for a railway project under Section 2(7) of the Railways Act, 1989. By an order dated 7 July 2016, authorities awarded compensation of Rs. 9,34,500.

Dissatisfied with the quantum of compensation, Agrawal sought enhancement before the Arbitrator-cum-Additional Commissioner, Bilaspur, under Section 20F of the Railways Act. The Arbitrator rejected the claim by an award dated 28 August 2023, holding that the compensation was fair and reflected prevailing market rates.

Agrawal then filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the Commercial Court, Bilaspur. He relied on a State Government notification dated 20 December 2023 assigning disputes valued between Rs. 10 lakh and Rs. 50 lakh to the Commercial Court.

On 1 December 2025, the Commercial Court dismissed the application as barred by limitation. Agrawal challenged that order in an appeal under Section 13 of the Commercial Courts Act.

Agrawal argued that the Commercial Court wrongly rejected his application solely on the ground of limitation and that a substantive right to adjudication on merits should not be defeated by delay. He further contended that he had approached the Commercial Court in good faith based on the State Government notification.

Indian Railways opposed the appeal, contending that proceedings arising from land acquisition under the Railways Act could not be treated as commercial disputes in the absence of any Central Government notification bringing such matters within the ambit of the Commercial Courts Act. It argued that the competent forum was the Principal District Judge, Bilaspur, and relied on the earlier decision in Anand Khedia & Others v. Commissioner-cum-Arbitrator, Bilaspur.

The High Court examined the decision in Anand Khedia in detail and noted that the facts were substantially similar. In that case, an award arising from land acquisition proceedings had initially been challenged before the District Court and was subsequently transferred to the Commercial Court pursuant to the State Government notification dated 20 December 2023.

The Coordinate Bench had held that disputes arising from such land acquisition proceedings do not qualify as commercial disputes under Section 2(1)(c) of the Commercial Courts Act.

Applying that precedent, the High Court held that a petition under Section 34 of the Arbitration and Conciliation Act challenging an award passed in land acquisition proceedings could not be entertained by a Commercial Court. It observed that such proceedings do not fall within the statutory definition of a commercial dispute.

The Bench further held that the Commercial Court committed a jurisdictional error by entertaining the petition. Although the issue of jurisdiction had not been specifically raised in the appeal, the Court observed that it went to the root of the matter and could therefore be considered.

Accordingly, the High Court set aside the impugned order and granted liberty to Agrawal to institute appropriate proceedings before the competent forum.

For Petitioner: Mr. Vikas Kumar Pandey