National Highways Authority of India v. Sayedabad Tea Company, 2019 SCC ONLINE SC 1102

NATIONAL HIGHWAYS AUTHORITY OF INDIA V. SAYEDABAD TEA COMPANY

Whether or not Section 11 (6) of the Arbitration and Conciliation Act of 1996 stands forfeited when the central Government exercised its right, which is bestowed by Section 3G (5) of the National Highway Act 1956 Act, to appoint an Arbitrator?

Being a special enactment, the National Highway Act of 1956 is a code in and of itself that lays out the acquisition process as well as the method used to determine compensation by the competent authority. Anyone who feels that the compensation set under subsections (1) or (2) of Section 3G of the Act of 1956 is unfair can certainly move to appoint an arbitrator, who the Central Government is required to name under Section 3G(5) of the Act of 1956.

The Appellant (National Highways Authority of India) acquired the subject land, which is 5.08 acres in size and is part of the “Sayedabad Tea Estate” in Mouza Purba, in accordance with its authority under Section 3(D) of the Act 1956, by means of a notification dated November 22, 2005, in order to build highways.
On December 8, 2006, the respondent applicant submitted a request to the Central Government for the appointment of an arbitrator in accordance with Section 3G(5) after expressing dissatisfaction with the compensation award made by the appropriate authority under paragraph (1) of Section 3G of the Act, 1956.
It is claimed that the Central Government failed to react to his request for the appointment of an arbitrator in accordance with a letter dated December 8, 2006, within a reasonable amount of time.
The High Court of Calcutta held that the right of appointment of the Arbitrator by the Central Government stands forfeited as it failed to appoint the Arbitrator until the filing of the application under Section 11(6) of the Act, 1996 before the High Court of Calcutta and appointment of Arbitrator during the pendency of proceedings, cannot be said to be a valid appointment and hence referred the matter to be placed before the Chief Justice for naming an Arbitrator to vide its Order dated July 6 2007.
Getting the review application dismissed in the Hon’ble High Court of Calcutta, the Appellant moved to the Supreme Court.

According to the Hon’ble Supreme Court, the High Court of Calcutta did not have the authority to appoint an arbitrator under Section 11 of the Act, 1996.
The Arbitration Act’s provisions can only be used where the Highway Act is silent, the Court further noted. As a result, Section 11, in this instance, cannot be upheld.
The Arbitration Act’s provisions can only be used where the Highway Act is silent, the Court further noted. As a result, Section 11, in this instance, cannot be upheld.
The Arbitrator was ratified by the Court and given immediate instructions to decide the case and present the arbitral ruling. The earlier rulings of the High Court were overturned by the Supreme Court.