Writ Petition Maintainable If Arbitrator Refuses To Entertain Application U/S 3G(5) Of National Highways Act: Kerala High Court

The Kerala High Court bench of A. Muhamed Mustaque and S. Manu JJ. while hearing a writ petition has held that when an arbitrator appointed by the Central Government refuses to entertain an application u/s 3G(5) of the National Highways Act, 1956, the Courts can entertain a petition under Article 226 to the limited extent of referring the dispute to arbitration. Section 3G(5) places a statutory obligation upon the District Collector, who acts as an arbitrator, to receive applications for adjudication of disputes relating to the determination of compensation. Facts A writ petition under Article 226 of the Constitution was filed by the Claimant challenging an order passed by the District Collector, who is the statutory arbitrator under the National Highways Act. In the writ appeal, the Court observed that a writ petition is not maintainable when challenging an arbitral award. The Court treated the impugned order in the writ petition as an arbitral award. The Court was of the opinion that what was challenged before it was an award passed by the arbitrator under the National Highways Act. Analysis of the Court The Court observed that there is no comprehensive definition of 'award' under the A&C Act. Section 2(1)(c) of the A&C Act states that an arbitral award includes an interim award, and the meaning of the award would have to be deduced from general principles of civil law. Section 2(2) of the Code of Civil Procedure defines 'decree' as a formal expression of an adjudication which conclusively determines the rights of the parties. In Janaki and Ors. v. V.R.S. Krishnan and Ors. [2024 (3) KHC 287] laid down essential characteristics of the decree which are as follows: “ii. The decision must have been on the right of the parties with regard to any matter in controversy in the suit. iv. the decision of the Court formally expressed such controversy in the suit. v. On determination, nothing left for the parties for future except by recourse to challenge by way of appeal or otherwise” Court noted that the arbitral proceedings commenced on the date on which a Section 21 notice requesting the dispute to be referred to arbitration was received by the respondent. Any decision made prior to the commencement of the proceedings cannot be treated as an award. The definition of decree under the Code of Civil Procedure provides guidance to the types of decisions that can be qualified as an award.It said that for a decision to be treated as an award, there must be a commencement of arbitral proceedings; the award should be issued by the arbitrator in accordance with the procedure required to be followed, and the award must determine all or some of the issues in the proceedings, the award must decide the matter in controversy finally or as an interim award. Court held that the decision of the District Collector, who is an arbitrator, refusing to admit the dispute referred for arbitration cannot be termed as an award as it was made prior to the commencement of the arbitral proceedings. The Central Government has notified the District Collector as an arbitrator; if the District Collector refuses to entertain an application u/s 3G(5) of the National Highways Act, such refusal can be challenged under Article 226 of the Constitution. The Court further observed that there is a statutory obligation on the District Collector to receive applications u/s 3G(5) and adjudicate the same in accordance with the procedure under the A&C Act. In essence, if the arbitrator refuses to entertain an application u/s 3G(5), the Court can exercise its jurisdiction under Article 226 to the limited extent of directing the arbitrator to initiate the arbitral proceedings. The Court, therefore, referred the parties to arbitration. Case Title: P.V. George v. National Highway Authority of India And Ors. Case Number: RP No. 1088 of 2024 & 1117 of 2024 in WA No. 1600 of 2022Citation: 2025 LiveLaw (Ker) 70 Counsel for the petitioner: Mr. T. Rajasekharan Nair Adv. Counsel for the Respondent: Ms. Nisha Bose, Senior Government Pleader Click Here To Read/Download The Order

Writ Petition Maintainable If Arbitrator Refuses To Entertain Application U/S 3G(5) Of National Highways Act: Kerala High Court

Mohd Talha Hasan

Tags