2023 (4) TMI 1396 - HC - Indian Laws

2013 Land Acquisition Act applies when compensation deposited but not paid to majority landholders before deadline

National Highways Authority of India and Ors. Versus Modan Singh and Ors.

National Highways Authority of India and Ors. Versus Modan Singh and Ors. - 2023:PHHC:048222 ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment are:1. Whether the provisions of The Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 (the 2013 Act) apply to the land acquisition in question, given that the compensation was not paid to the majority of the land holdings under acquisition by 31.12.2014.2. Whether the arbitral award, which enhanced the compensation for the acquired land, was validly reasoned and in accordance with the legal requirements under the Arbitration and Conciliation Act, 1996 (the 1996 Act).3. The applicability of the guidelines issued by the Ministry of Road Transport and Highways (MORTH) in determining the market value of the land and the compensation payable.ISSUE-WISE DETAILED ANALYSISIssue 1: Applicability of the 2013 ActThe legal framework involves the 2013 Act, which was enacted to provide fair compensation and rehabilitation for those affected by land acquisition. The Act's applicability to acquisitions under the National Highways Act, 1956 (the 1956 Act) was debated, especially in light of the guidelines issued by MORTH.The Court interpreted that the 2013 Act's beneficial provisions apply to acquisitions under the 1956 Act, especially when the compensation was not paid to the majority of land holdings by 31.12.2014. The Court emphasized the intent to eliminate discrimination between land acquisitions under different enactments.Key evidence included the guidelines issued by MORTH, which clarified that the First Schedule of the 2013 Act applies if compensation was not paid to the majority of land holdings by the specified date.The Court concluded that the 2013 Act applies to the acquisition in question, rejecting the argument that mere deposit of compensation equates to payment.Issue 2: Validity of the Arbitral AwardThe relevant legal framework includes Sections 31(3) and 28(1)(a) of the 1996 Act, which require arbitral awards to state reasons unless otherwise agreed by the parties.The Court found that the arbitral award lacked sufficient reasoning, failing to address the factors considered in determining compensation. The award was deemed patently illegal for not complying with the substantive law.The Court highlighted that the lack of reasons in the award violated the requirement for a speaking award, which is essential for ensuring fair consideration of the dispute.The Court concluded that the arbitral award was invalid due to the absence of adequate reasoning, rendering it subject to being set aside.Issue 3: Applicability of MORTH GuidelinesThe guidelines issued by MORTH were pivotal in determining the applicability of the 2013 Act. They clarified the conditions under which the Act's provisions apply, specifically addressing the payment of compensation.The Court interpreted the guidelines to mean that the 2013 Act applies when compensation was not paid to the majority of land holdings by 31.12.2014, aligning with the guidelines' intent to ensure fair compensation.The Court rejected the argument that deposit of compensation equates to payment, emphasizing the distinct terms used in the guidelines and the statutory provisions.The Court concluded that the guidelines support the application of the 2013 Act to the acquisition in question.SIGNIFICANT HOLDINGSThe Court established several core principles:'The beneficial provisions of the 2013 Act would also be applicable to the acquisition in question.''Non-recording of reasons in consonance with Section 31(3) of the 1996 Act results in violation of Section 28(1)(a) of the 1996 Act, rendering the award patently illegal.'The Court set aside the arbitral award and the impugned orders, allowing the parties to pursue fresh arbitration in accordance with the law.The judgment emphasizes the need for arbitral awards to contain adequate reasoning, ensuring transparency and fairness in the determination of compensation for land acquisition.