1 BETWEEN: IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 16 TH DAY OF JULY, 2012 BEFORE THE HON BLE MR. JUSTICE ASHOK B. HINCHIGERI WRIT PETITION Nos.6137-6141/2012 (LA-KIADB) AND WRIT PETITION Nos.6142-6143/2012 1. S.Arun Kumar Shetty, S/o B.S.R.Shetty, Aged about 43 years, Praful Medicals, Bikarnakatte, Kaikamba, Kulshekara Post, Mangalore 575 005. 2. John Fernandez, S/o Late Marian Fernandez, Aged about 59 years, Prashanth Wines, Bikarnakatte, Kaikamba, Kulshekara Post, Mangalore 575 005. 3. Erik J.M.Castelino S/o Late Ligory Castelino, Aged about 64 years, Sacred Hearts, Jayashree Gate, Kaikamba, Kulashekara Post, Mangalore 575 005. 4. Smt.Fathima Bi, W/o Late Sheik Dawood Saheb, Aged about 61 years, Bikarnakatte, Kaikamba, Kulshekara Post, Mangalore 575 005.
2 5. Mrs.Juliana Letitia Vaz, Aged about 60 years, Padaru Village, Bikarnakatte, Kaikamba Kulshekara Post, Represented by her power of Attorney Holder, Mrs.Leena Cutinha, Kulashekar, Mangalore 575 005. 6. Arthur M Castelino, S/o Late Ligory Castelino Aged about 62 years, Leema, Jayashree Gate, Kulashekar Post, Mangalore 575 005. 7. Sharath Kumar, S/o Late B.Jayanthi, Aged about 49 years, Sheetal Traders, Bikarnakattee, Kaikamba, Kulashekar Post, Mangalore 575 005. Petitioners AND: (By Sri Sanath Kumar Shetty.K, Advocate) 1. Special Land Acquisition Officer and Competent Authority, Office of the National Highways Authority, KAIDB, Bikampady, Mangalore 575 014. 2. National Highway Authority of India, Having its office at KAIDB, Bikampady, Mangalore 575 014, Represented by its Project Director. 3. Union of India, Represented by its Secretary to the Ministry
3 Of Inland and Surface Transport, New Delhi 110 001. 4. The Deputy Commissioner, D.K., Mangalore. 5. The State of Karnataka, Represented by Secretary to the Revenue Department, M S Building, Dr. Ambedkar Veedhi, Bangalore 560 001. Respondents (By Smt.Shilpa Shah, Advocate for M/s Singhania and Partners for R1 and 2; Sri Kalyan Basavaraj, ASG for R3; Sri K Krishna, AGA for R4 and R5) These writ petitions are filed under Articles 226 and 227 of the Constitution of India praying to direct the R1 to R3 to pay to the petitioners the balance compensation at the rate of `70,000/- per cent before taking the possession of the properties of the petitioners and etc. These writ petitions coming on for preliminary hearing this day, the Court made the following: O R D E R The petitioners have sought a direction to the respondent Nos.1 to 3 for the payment of balance compensation of `70,000/- per cent. 2. The facts of the case in brief are that the lands in question were acquired for the purpose of widening the National Highway No.13. The respondent No.1 passed the award, dated 30.10.2007 determining the compensation at `1,60,000/- per
4 cent. Aggrieved by the aforesaid award, the respondent No.2 National Highway Authority of India raised the arbitration proceedings before the Arbitrator and Deputy Commissioner, Dakshina Kannada District, Mangalore. The Arbitrator raised the amount from `1,60,000/- to `2,40,000/- per cent on 3.4.2010. This award of the Arbitrator is challenged by the respondent No.2 by filing the necessary arbitration suit before the District Court. When thus stood the state of affairs, the respondents sought to take the possession of the lands. The notice calling upon the petitioners to surrender the possession was challenged by the petitioners in W.P.Nos.41572-41576/2011 and 41577-41578/2011. This Court, by its order, dated 15.12.2011 disposed of these petitions with the following order: The impugned notices can be acted upon, but only after the respondent No.2 deposits the balance compensation amounts of `70,000/- per cent. Once the petitioners are informed of the depositing of the balance compensation amount of `70,000/- per cent, they shall not delay the act of handing over the possession, as (a) the acquisition of the land is upheld by no less a Court than the Apex Court and (b) in public interest the project of road widening has to take place immediately.
5 3. Pursuant to the passing of the afore-extracted order, the respondent No.2 has deposited the balance compensation amount `70,000/- per cent with the respondent No.1. On the petitioners request for the disbursement of the amount so deposited, the respondent No.1 vide his letter, dated 18.2.2012 (Annexure-E) informed the petitioners that there is no order for the payment of balance compensation amount of `70,000/- per cent. The said letter calls upon the petitioners to accept the compensation as per the office notice, dated 21.10.2011. 4. Sri Sanath Kumar Shetty K, the learned counsel for the petitioners submits that as soon as the amount is deposited, the competent authority is obliged to disburse the same to the landlosers. He read out the provisions contained in Section 3H(1) and (2) of the National Highways Act, 1956 ( the said Act for short). The same are extracted hereinbelow: 3H. Deposit and payment of amount. (1) The amount determined under section 3G shall be deposited by the Central Government in such manner as may be laid down by rules made in this behalf by that Government, with the competent authority before taking possession of the land. (2) As soon as may be after the amount has been deposited under sub-section (1), the competent authority
6 shall on behalf of the Central Government pay the amount to the person or persons entitled thereto. 5. Sri Shetty submits that the respondent Nos.1 and 2 seem to be labouring under the impression that the mere pendency of the arbitration suits acts as the stay of the Arbitrator s award. He submits that such a stand is taken by placing reliance on Section 36 of the Arbitration and Conciliation Act, 1996. The same is extracted hereinbelow: 36. Enforcement :- Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908, (5 of 1908) in the same manner as if it were a decree of the Court. 6. He submits that the provisions of the Arbitration and Conciliation Act, 1996 shall apply to every arbitration, but only subject to the provisions of the National Highways Acts, 1956. In this regard he read out Section 3G(6) of the said Act. The same is extracted hereinbelow: 3G. Determination of amount payable as compensation. (6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to every arbitration under this Act.
7 7. In view of the provisions contained in Section 3G(2) and 3H(2), he would contend that the release of the compensation amount cannot be deferred on the ground of the pendency of the arbitration suit. 8. Smt. Smt.Shilpa Shah, the learned counsel representing M/s.Singhania and Partners for the respondent Nos.1 and 2 submits that the provisions of the Arbitration and Conciliation Act, 1996 would apply to the awards passed under other statutes so long as they are not inconsistent with other enactments or with any Rules framed thereunder. She submits that there is no distinction between an award based on the agreement of parties and a statutory award. For canvassing this point, she relies on the decision of the Allahabad High Court in the case of DISTRICT CO-OPERATIVE FEDERATION LTD., MEERUT AND ANOTHER v. REGISTRAR, CO-OPERATIVE SOCIETIES, U.P. LUCKNOW AND OTHERS reported in AIR 1966 ALLAHABAD 489. 9. Nextly, she sought to draw support from the Apex Court s judgment in the case of FIZA DEVELOPEERS AND INTER-TRADE P.LTD. v. AMCI (I) PVT. LTD. AND ANOTHER
8 reported in 2009(6) KLJ 576 for advancing the submission that until the disposal of the application under Section 34 of the Arbitration and Conciliation Act, 1996, there is an implied prohibition for enforcing of the arbitral award. The very filing and pendency of the application under Section 34, in effect, operates as a stay of the enforcement of the award. 10. The learned counsel submits that the petitioners conduct borders on the contempt of the court. Despite the clear order directing them not to delay the act of handing over the possession, the petitioners are raising one after the other untenable resistance. She submits that the order, dated 15.12.2011 passed by this Court in W.P.Nos.41572-41576/2011 and 41577-41578/2011 has attained the finality. As the petitioners have not challenged, they are bound by the same. In the said order, there is no direction for the release or disbursal of the amounts to the petitioners. 11. She also brings to my notice the provisions contained in Section 3E of the said Act for advancing the submission that the pre-condition for taking the possession is depositing of the
9 amount and not disbursing it. The said provisions are extracted hereinbelow: 3E. Power to take possession. (1) Where any land has vested in the Central Government under subsection (2) of section 3D, and the amount determined by the competent authority under section 3G with respect to such land has been deposited under sub-section (1) of section 3H, with the competent authority by the Central Government, the competent authority may by notice in writing direct the owner as well as any other person who may be in possession of such land to surrender or deliver possession thereof to the competent authority or any person duly authorised by it in this behalf within sixty days of the service of the notice. (2)If any person refuses or fails to comply with any direction made under sub-section (1), the competent authority shall apply (a) in the case of any land situated in any area falling within the metropolitan area, to the Commissioner of Police; (b) in case of any land situated in any area other than the area referred to in clause (a), to the Collector of a District, and such Commissioner or Collector, as the case may be, shall enforce the surrender of the land, to the competent authority or to the person duly authorised by it.
10 12. The learned counsel for the respondent Nos.1 and 2 submits that the possession from the petitioners is already taken. Her submission is placed on record. 13. Sri K.Krishna, the learned Additional Government Advocate appearing for the respondent Nos.4 and 5 submits that the arbitration application itself would become infructuous, if the amounts, as determined by the respondent No.1 are disbursed to the petitioners. He also submits that as per the interim settlement during the pendency of the arbitration proceedings before the respondent No.4, both the parties had agreed to the depositing of `90,000/-. 14. The submissions of the learned counsel have received my thoughtful consideration. The concerns of the respondent Nos.1, 2 and 5 that if the amounts, as determined and deposited by the respondent No.1 are disbursed, they would have difficulty in recovering the same. Virtually the arbitration application proceedings may become infructuous. Similarly, the need of the hour is to give immediate succor to the petitioners to enable them to tide over their financial crisis on account of the compulsory acquisition of their lands. What cannot be lost sight
11 of is that the second respondent s liability to pay the amounts has not arisen from any monetary or commercial transaction. It has arisen from the compulsory acquisition of the petitioners lands for a public purpose. 15. The stand of the respondent No.1, as contained in its letter, dated 18.2.2012 (Annexure-E) is not tenable. One of the reasons for the first respondents not disbursing the amounts is that there is no order in W.P.Nos.41572-41576/2011 and 41577-41578/2011 for the release of the amounts. Such a reason is not tenable. The question that fell for this Court s consideration in the said writ petitions is whether the possession can be taken without depositing the amounts by the respondent No.2 with the respondent No.1. 16. This Court would only review the administrative acts of the respondents. Its scrutiny is confined to the question as to whether or not their acts are in accordance with the statutory provision. Section 3H(2) of the said Act, the provisions of which are extracted hereinabove, contains the mandatory requirement that the competent authority shall pay the amounts to the person or persons entitled thereto. This mandatory requirement
12 cannot be disregarded by taking the stand that the mere pendency of the arbitration application before the District Court acts as a stay for the enforcement of the award under Section 34 of the Arbitration Act. Because Section 3G(6) of the said Act states that the provisions of the Arbitration and Conciliation Act shall apply to every arbitration made under the National Highways Act, 1956, but subject to the provisions of the latter (National Highways Act, 1956). If there is repugnancy or conflict between the two statutes, the provisions of both the statutes are to be constructed harmoniously so as to ensure that one Act does not render the other Act unoperative or otiose. In the instant case, if the provisions of Section 36 of the Arbitration and Conciliation Act, 1996 are held to be applicable to the exclusion of the provisions contained in Section 3H(2) of the National Highways Act, 1956, then it amounts to defeating the legislative intent. The legislature has willed, as is discernable from the provisions contained in Section 3H(1) and (2) that (a) The possession cannot be taken without depositing the amounts. (b) On the depositing of the amounts, they are to be disbursed to the concerned persons.
13 17. It is the legislative concern that the disbursement of the compensation should not be delayed. The petitioners request is only for the release of the amounts as awarded by the first respondent; at the moment they are not clamouring for the amounts, enhanced by the fourth respondent arbitrator. 18. For all the aforesaid reasons, I have no hesitation in directing the respondent No.1 to release the amount of `70,000/- per cent, as deposited by the respondent No.2, to the petitioners forthwith. However, the second respondent s concerns also cannot be left unaddressed. The ends of justice would be met by my passing the following order: (i) The respondent No.1 shall disburse the balance compensation amount of `70,000/- per cent to the petitioners on scrutinising their title-deeds, etc and satisfying himself of their entitlement. (ii) The disbursement shall be subject to the final outcome of the arbitration proceedings pending consideration before the District Court. (iii) The petitioners shall file the undertaking and the indemnity bond to the effect that if the District
14 Court, Mangalore reduces the compensationamounts, the petitioners shall pay back the same. as to costs. 19. These petitions are accordingly disposed of. No order VGR/MD Sd/- JUDGE