With special reference to National Highways Authority of India (NHAI) v/s Sheetal Jaidev Vade and others
In an appeal filed by NHAI, an order of the Aurangabad Bench of the Bombay High Court directing NHAI to deposit the entire compensation amount as awarded by the learned arbitrator was under challenge. The Award passed against NHAI by the learned arbitrator enhanced the original compensation amount in favour of the Original Petitioners/Respondents.
At this point, it is relevant to point out that the land acquisition proceedings in the NHAI case are governed by the provisions of Section 13 of the National Highways Authority of India Act, 1988, which provides —
“S. 13. Compulsory acquisition of land for the Authority.— Any land required by the Authority for discharging its functions under this Act shall be deemed to be land needed for a public purpose and such land may be acquired for the Authority under the provisions of the National Highways Act, 1956 (48 of 1956)].”
Section 13 provides that for the purpose of land acquisition by NHAI, the provisions of the National Highways Act, 1956 would apply. The relevant provisions of the National Highways Act, 1956 (“NH Act”) relating to acquisition of land are laid down in sections 3-A and 3-G of the Act. Sub-section (5) of Section 3-G of the NH Act, provides that in the event of a dispute regarding compensation awarded by the competent authority, the aggrieved party shall have the right to have an arbitrator appointed by the central government to decide the issue.
Sub-sections (1) to (5) of Section 3-G deal with the compensation on acquisition of land and appointment of Arbitrator in the event of a dispute. Sub-section (6) further provides that every arbitration under the NH Act, 1956 shall be governed by the provisions of the Arbitration and Conciliation Act, 1996.
From the said order in the NHAI case, it can be seen that the learned ASG had submitted to the Aurangabad Bench that the award of the arbitrator was executable before the concerned executing court. She further submitted that the original petitioners/respondents had a statutory remedy which they did not resort to. The statutory remedy referred to by the learned ASG arises out of the fact that since the issue relating to compensation was statutorily determinable only by an arbitrator as per sub-section (5) of Section 3-G, it is but only logical that all further issues arising out of arbitration proceedings would be governed by the Arbitration and Conciliation Act, 1996. This position is also laid down in sub-section (6).
Section 36 of the Arbitration & Conciliation Act, 1996 provides for enforcement of awards. Sub-section (1) states that awards under the Arbitration & Conciliation Act,1996 are enforceable in the same manner as a decree of a court under the provisions of the Code of Civil Procedure, 1908.
The Apex Court has, in paras 11 and 12, observed that the reliefs that were sought in the original writ petition were in the nature of execution of the award passed by the learned arbitrator tribunal/court. It was further observed that the Original writ petitioners had an efficacious, alternate remedy to execute the award by initiating appropriate execution proceedings before the competent executing court. The Hon’ble Aurangabad Bench ought not to have entertained the original writ petitions but should have relegated the original writ petitioners to avail the alternate remedy under the Arbitration and Conciliation Act.
The Apex Court in Para 13 held that considering the stated facts and circumstances, such writ petitions under Art. 226 of the Constitution of India to execute awards passed by arbitral tribunals without relegating the judgement debtor before the competent executing court, were not maintainable. Para 13 of the said NHAI judgement is reproduced herein below –
“13. We disapprove the entertaining of such writ petitions under Article 226 of the Constitution of India to execute the award passed by the learned Arbitral Tribunal/Court, without relegating the judgment creditor in whose favour the award is passed to file an execution proceeding before the competent Executing Court.”
[Italics and emphasis supplied]
Therefore, the judgement of the Hon’ble Apex Court in the NHAI case deals only with the issue of awards passed under Arbitration and Conciliation Act,1996 read with the provisions of the NH Act, 1956 and the NHAI Act, 1988. The ratio cannot be applied to awards passed under the erstwhile Land Acquisition Act or the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“Land Acquisition Act of 2013”). The only remedy available to any person aggrieved under the Act, insofar as non-payment of compensation awarded originally or on reference, is to approach the Hon’ble High Court under Article 226 or the Supreme Court under Article 32, as the case may be.
At this stage, it would be worthwhile to analyse the case of a person, whose land / property is acquired under the Land Acquisition Act of 2013 and who has not been paid the compensation as declared in the Award.
The Land Acquisition Act of 2013 is a separate code in itself which exhaustively lays down the scheme relating to the acquisition of land by the Government for public purpose.
The long title of the Act of 2013 reads as under:
“An Act to ensure, in consultation with institutions of local self-government and Gram Sabhas established under the Constitution, a humane, participative, informed and transparent process for land acquisition for industrialisation, development of essential infrastructural facilities and urbanisation with the least disturbance to the owners of the land and other affected families and provide just and fair compensation to the affected families whose land has been acquired or proposed to be acquired or are affected by such acquisition and make adequate provisions for such affected persons for their rehabilitation and resettlement and for ensuring that the cumulative outcome of compulsory acquisition should be that affected persons become partners in development leading to an improvement in their post acquisition social and economic status and for matters connected therewith or incidental thereto”[Emphasis supplied]
The intent of the legislature in repealing the erstwhile Land Acquisition Act, 1894 with the present Land Acquisition Act of 2013 can also be understood from the Statement of Objects and Reasons. One of the notable part of the Statement of Objects and Reasons with respect to the issue of rehabilitation including monetary compensation of affected parties is laid down in para 5 of the Statement which is reproduced below:
“7. There is an imperative need to recognise rehabilitation and resettlement issues as intrinsic to the development process formulated with the active participation of affected persons and families. Additional benefits beyond monetary compensation have to be provided to families affected adversely by involuntary displacement. The plight of those who do not have rights over the land on which they are critically dependent for their subsistence is even worse. This calls for a broader concerted effort on the part of the planners to include in the displacement, rehabilitation and resettlement process framework, not only for those who directly lose their land and other assets but also for all those who are affected by such acquisition. The displacement process often poses problems that make it difficult for the affected persons to continue their traditional livelihood activities after resettlement. This requires a careful assessment of the economic disadvantages and the social impact arising out of displacement. There must also be holistic effort aimed at improving the all-round living standards of the affected persons and families.”[Emphasis supplied]
The power of the Land Acquisition Officer is described in Section 38 of the Act of 2013. Sub-section (1) of Section 38 provides that possession of the land can be taken only after ensuring full payment of the compensation. Section 38(1) is reproduced hereinbelow:
“38. Power to take possession of land to be acquired.—(1) The Collector shall take possession of land after ensuring that full payment of compensation as well as rehabilitation and resettlement entitlements are paid or tendered to the entitled persons within a period of three months for the compensation and a period of six months for the monetary part of rehabilitation and resettlement entitlements listed in the Second Schedule commencing from the date of the award made under Section 30:
Where an aggrieved landowner’s land were acquired by the Acquisition Authority and handed over to the Requisitioning body under a duly declared Award, albeit without following the procedure laid down in Section 38, the landowner’s right to receive compensation crystallised on the Acquisition Authority declaring the Awards and / or before taking possession of the land / property.
When, the landowner’s right to receive compensation declared under the Award gets converted into persistent efforts to pursue the recovery with the Acquisition Authority fails, even though the money is legally due to him, it amounts to a wilful failure of the Acquisition Authority to discharge its obligation under the law to release the compensation under the Award to the landowner. In such a situation, the Petitioner is very well entitled to exercise his right to approach the High Court having jurisdiction over the area under which the land is acquited under the Land Acquisition Act, 2013. The landowner’s right would not be affected by the ratio in the NHAI case and he is not required to approach the Executing Court for purpose of executing the Awards under the Land Acquisition Act, 2013. The Land Acquisition Act of 2013 does not provide an alternate and efficacious remedy to an aggrieved landowner insofar as recovery of compensation is concerned.
With reference to the term “decree” as discussed in the NHAI judgement, the distinction between a “decree” as identified with the Award in the NHAI case and “award” as applicable under the Land Acquisition Act of 2013 is explained below:
|Issue||As dealt with in the NHAI case||As applicable under the Land Acquisition Act, 2013|
|Power to acquire||Land required by the NHAI for its own use is to be acquired as per the provisions of the National Highways Act, 1956. Section 13 of the NHAI Act, is the enabling provision.||Land required by private or public entities for public purposes are acquired by the Government by following the due process laid down under the Land Acquisition Act, 2013. The Act is a separate code in itself dealing exhaustively and exclusively on issues relating to acquisition of land, including determination and payment of compensation.|
|Redressal mechanism in case of dispute relating to compensation to land owners.||Section 3-G of the National Highway Act provides that any party aggrieved with the compensation awarded to it shall apply to the Central Government to apply an Arbitrator to decide on the compensation amount.||In case of any objection by an “interested person”, the person whose land is acquired, with respect to the amount of compensation, such person is entitled to make a Reference under Section 64 of the Act.|
Furthermore, as per Section 77 of the Act, the awardee is entitled to be paid the original compensation awarded under protest, when there is an objection to the amount of compensation.
|Sub-section (5) of Section 3-G states that the provisions of the Arbitration and Conciliation Act, 1996, shall apply to the proceedings before the Arbitrator to whom the dispute on compensation is referred to.||The proceedings before the Reference Authority are not governed by the Arbitration and Conciliation Act. Hence, the award passed by the Land Acquisition Authority or enhancement if any, decided by the Reference Authority are not awards as are understood under the provisions of the NHAI Act, read with the NH Act.|
|Consequentially, the Award passed by the Arbitrator under the Arbitration Act, is a decree and the process to recover the amount in the decree is provided under Section 36 of the Act, read with the Code of Civil Procedure, 1908|
|Jurisdiction of Civil Courts||By virtue of Section 36 of the Arbitration and Conciliation Act, 1986, read in conjunction with Section 3-G of the National Highway Act, 1956 and the NHAI Act, 1988, civil courts have jurisdiction with respect to enforcement of a decree.||Section 63 of the Land Acquisition Act, 2013 specifically bars the jurisdiction of civil courts to entertain any dispute relating to land acquisition. The only remedy available to the aggrieved party is to approach the Hon’ble High Court or the Hon’ble Supreme Court under Article 226 or 227, as the case may be.|
The aggrieved land owner can therefore exercise the right vested in him under Section 63 of the Right to Fair Compensation Act / Land Acquisition Act, 2013 by filing a Writ under Article 226 of the Constitution of India. The NHAI Act r/w NH Act and the Arbitration & Conciliation Act, deal with land acquired for the use of NHAI, and the said two Acts provide alternative and efficacious remedy in the form of applying to the executing court for purpose of enforcing the decree under the Code of Civil Procedure, 1908. In contrast, issues relating to acquisitions of land under the Land Acquisition Act, 2013 are governed within the parameters of the said Act and which expressly bars the jurisdiction of civil courts, except providing the right to invoke Article 226 of the Constitution to seek appropriate relief under the Writ jurisdiction of the High Courts or the Supreme Court.
The Hon’ble Apex Court has held that on matters on which jurisdiction of the civil court is excluded, neither consent of the parties nor an order of the special tribunal which has jurisdiction to decide those matters, can confer jurisdiction on the civil court. Relevant portion of the said judgement in the matter of Ram Gopal. Reddy v. Addl. Custodian of Evacuee Property is reproduced below-
“The fact that the Custodian in his order said that the appellant could go and establish his right in a competent court is of no assistance to the appellant, for if the law bars the jurisdiction of civil and revenue courts the Custodian’s observation that the party before him could go to a competent court to establish his right will not confer jurisdiction on a civil or revenue court.”
Rule of Precedent and Application to Facts of Each Case – whether the NHAI judgement can be applied to all cases of land acquisition?
Rule of precedent is laid down in Article 141 of the Constitution of India which reads as follows:
141. Law declared by Supreme Court to be binding on all courts.—The law declared by the Supreme Court shall be binding on all courts within the territory of India.
Article 141 provides that rule of precedent would apply when any “law” is laid down by the Supreme Court in the course of any judgement decided by it. It has been held in Deena v. Union of India that ratio of a case can be extended to other identical situations, factual and legal, but not mechanically disregarding the rationale of that case. Relevant portion of para 15 at page 660 is reproduced below
“15. … Any case, even a locus classicus, is an authority for what it decides. It is permissible to extend the ratio of a decision to cases involving identical situations, factual and legal, but care must be taken to see that this is not done mechanically, that is, without a close examination of the rationale of the decision which is cited as a precedent. Human mind, trained even in the strict discipline of law, is not averse to taking the easy course of relying on decisions which have become famous and applying their ratio to supposedly identical situations. …”[Emphasis supplied]
In Zee Telefilms v. Union of India a 5-Judge Constitution Bench of the Hon’ble Supreme Court has held that a decision cannot be read as a statute and is an authority for the questions of law determined by it as per facts. Para 254 of the judgement is reproduced below:
254. Are we bound hands and feet by Pradeep Kumar Biswas [(2002) 5 SCC 111 : 2002 SCC (L&S) 633] ? The answer to the question must be found in the law of precedent. A decision, it is trite, should not be read as a statute. A decision is an authority for the questions of law determined by it. Such a question is determined having regard to the fact situation obtaining therein. While applying the ratio, the court may not pick out a word or a sentence from the judgment divorced from the context in which the said question arose for consideration. A judgment, as is well known, must be read in its entirety and the observations made therein should receive consideration in the light of the questions raised before it. (See Punjab National Bank v. R.L. Vaid [(2004) 7 SCC 698 : 2004 SCC (Cri) 2055] .)”[Emphasis supplied]
To conclude, therefore, a holistic view of the three different acts read together and applied to the issue dealt with by the Apex Court in the NHAI case clearly show that the ratio in the NHAI case is unique to the facts of the case, that is, acquisitions done under the NHAI Act and cannot be applied to acquisitions and issues arising therefrom under the Land Acquisition Act, 2013.
The NHAI judgement merely affirms a settled law that Art 226 cannot be invoked where the execution relates to execution of an award passed under the Arbitration and Conciliation Act, 1996, which itself provides for execution in terms of provisions contained in the Code of Civil Procedure, 1908. The rule of precedence cannot be invoked to apply the NHAI judgement supra to lands acquired under different acquisition laws, especially the Act of 2013, as the facts of each case would be completely different from the facts of the NHAI case and the law applicable to the NHAI matter.
The Acquisition Authority is bound to fulfil its statutory duty under the Land Acquisition Act, 2013 to pay the compensation amount under the provisions of Section 38 of the Land Acquisition Act, 2013. Failure to do so shall vest the aggrieved landowner to invoke the provisions of Section 63 of the Act to seek directions from the High Court to recover the compensation amount as declared in the Award. Needless to say, but important to add, that failure to release compensation under Award also makes the Land Acquisition Authority liable to pay interest to the person(s) whose land has been acquired under the Act as provided in Section 80 of the Act as per the method provided in Section 80 of the 2013 Act.