NATIONAL HIGHWAYS AUTHORITY OF INDIA V/S SAYEDABAD TEA COMPANY LTD. AND ORS

When the special law have specific provision, general law would impliedly be excluded

RELEVENT STATUTES: Arbitration and Conciliation Act 1996; National Highways Act 1956

BRIEF FACTS & PROCEDURAL HISTORY:

1. The relevant facts are that the subject land comprised in “Sayedabad Tea Estate” situated at Mouza Purba Madati, J.L. No. 108, Police Station Phansidewa, Dist. Darjeeling measuring 5.08 acres was acquired by the appellant (National Highways Authority of India) in exercise of its powers under Section 3(D) of the Act 1956 vide notification dated 22nd November, 2005 under L.A.P. Case No. 4/200405 for the purpose of construction of the highways.

2. The respondent applicant being dissatisfied with the award of compensation determined by the competent authority under subsection(1) of Section 3G of the Act, 1956 filed application for appointment of an Arbitrator in terms of Section 3G(5) to the Central Government on 8th December, 2006.

3. As alleged, since the Central Government has not responded to his request for appointment of an Arbitrator in terms of letter dated 8th December, 2006 within a period of 30 days from receipt of the request, application was filed on 7th March, 2007 to the Chief Justice/his designate for appointment of an Arbitrator invoking Section 11(6) of the Act, 1996.

4. The High Court of Calcutta taking note of the fact that the Arbitrator has been appointed by the Central Government under Section 3G(5) of the Act, 1956 after the respondent applicant had moved an application to the Chief Justice/his Designate invoking its power under Section 11(6) of the Act, 1996 held that right of appointment of the Arbitrator by the Central Government stands forfeited as it failed to appoint the Arbitrator until 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 vide its Order dated 6thJuly, 2007.

5. Getting the review application dismissed in the hon’ble high court of Calcutta, the appellant moved to the supreme court.

ISSUES:

1. Whether the application under Section 11 of the Arbitration and Conciliation Act, 1996is maintainable in view of Section 3G(5) of the National Highways Act, 1956 which provides for appointment of an Arbitrator by the Central Government ?

RATIO OF THE COURT:

1. Mr. Vikas Goel, learned counsel for the appellant raised the argument that:

2. The Act 1956 being a special enactment is a code in itself provide not only the procedure of acquisition but also the mode of determining compensation by the competent authority and any person, if aggrieved by compensation determined under subsections( 1) or (2) of Section 3G of Act 1956 can certainly move an application for appointment of an Arbitrator to which a Central Government is under obligation to appoint under Section 3G(5) of the Act 1956.

3. But the respondent applicant approached the High Court by filing an application under Section 11(6) of the Act 1996 which was not maintainable and this being the settled principles of law that the special law prevail over the general law, the provisions of Act 1996 could not have been invoked at least for the appointment of an Arbitrator in abrogating the power of the Central Government in appointing the Arbitrator as contemplated under Section 3G(5) of Act 1956 .

4. Per contra, Mr. Prashant Bhushan, learned counsel for the respondents, while supporting the order passed by the High Court of Calcutta impugned in the instant proceedings submitted that If the authority to whom application was filed for appointment of an Arbitrator under Section 3G(5) of Act, 1956 has failed to discharge its obligations within 30 days of presentation of the application or until filing of the application for appointment of an Arbitrator to the Chief Justice/his Designate under Section 11(6) of the Act, 1996

5. Relying on the judgement of General Manager (Project), National Highways and Infrastructure Development Corporation Ltd. Case the court in the present case was of the opinion that :

6. while dealing with the scope of subsections (5) and (6) of Section 3G of the Act 1956 with reference to Section 11 of the Act, 1996 that the Act 1956 being a special enactment and Section 3G in particular provides an inbuilt mechanism for appointment of an Arbitrator by the Central Government.

7. Hence Section 11 of the Act, 1996 has no application and the power is exclusively vested with the Central Government under Section 3G(5) of the Act, 1956 for appointment of an Arbitrator.

8. if the Central Government does not appoint an Arbitrator within a reasonable time, it is open for the party to avail the remedy either by filing a writ petition under Article 226 of the Constitution of India or a suit for the purpose but the remedy of Section 11 of Act 1996 is not available for appointment of an Arbitrator.

9. The court opined that It is a settled principles of law that when the special law sets out a self contained code, the application of general law would impliedly be excluded.

10. In the instant case, the scheme of Act, 1956 being a special law enacted for the purpose and for appointment of an arbitrator by the Central Government under Section 3G(5) of Act, 1956 and subsection (6) of Section 3G itself clarifies that subject to the provisions of the Act 1956. So far as the appointment of an Arbitrator is concerned, the power being exclusively vested with the Central Government as envisaged under subsection (5) of Section 3G of Act 1956, Section 11 of the Act 1996 has no application.

11. The usage of the expression “subject to” clearly indicates that the legislature intended to give overriding effect to the provisions of the Act, 1956 where it relates to the disputes pertaining to determination of the amount of compensation under the Act.

DECISION :

1. The hon’ble Supreme Court held that the High Court of Calcutta was not holding its competence to appoint an Arbitrator invoking Section 11 of Act, 1996.

2. The orders passed by the High Court dated 6th July, 2007 and 27th August, 2007 are hereby set aside. The Arbitrator may be appointed by the appellants in terms indicated above.