Judgment:
- 1 - WP No.104106/2022 R IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE6H DAY OF JANUARY, 2023 BEFORE THE HON'BLE MR JUSTICE N.S.SANJAY GOWDA WRIT PETITION NO.104106/2022 (LA-RES) BETWEEN: T. Younis @ Unees S/o. Haji T. Ameer Sab, Age 56 years Occ: Business, R/o.: Ward No.13, Amarawati, Taluka Hosapete. … Petitioner (By Shir Mallikarjunswamy B.Hiremath, Advocate) AND:
1. Special Land Acquisition Officer & The Competent Authority, National Highway Authority of India, Vidya Nagar, 4th Main Road, 5th Cross, Opp: Gangaparameshwari Kalyan Mantapa, Vidyanagar, Ballari-583 104.
2. National Highway Authority of India, By its Project Director, Hosapete-583 101. … Respondents (By Sri. Vinayak S. Kulkarni, AGA for R1 Smt. Shilppa Shah, Advocate for Sri. Shivaraj Ballolli, Advocate for R2) This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to issue a writ of certiorari quashing the impugned endorsement dated 20.05.2022, produced at Annexure-F, issued by the 1st respondent bearing No.SLAO/ NHAI/ BLR/ NH-13(50) 2022-23/55 & etc.-. 2 - WP No.104106/2022 This writ petition, having been heard and reserved for Orders, coming on for pronouncement, this day, the Court made the following:
ORDER1 Two endorsements issued by the Special Land Acquisition Officer (for short, “the Competent Authority”), National Highway Authority dated 20.05.2022 and 20.09.2022 vide Annexures-F and F1 respectively are challenged in this writ petition by the landowner.
2. The Competent Authority, by the above- mentioned endorsements, has informed the petitioner that the payment of the compensation in respect of the acquired lands belonging to the petitioner in Sy.Nos.503/A2 & 503/B2 of Amaravati Village, Hospet Taluk cannot be made because the National Highway Authority of India (for short, "NHAI") had received a legal opinion that it should not release the payment due to the pendency of the applications filed under Section 33 of the Arbitration and Conciliation Act, 1996 (for short, "the A & - 3 - WP No.104106/2022 C Act") and the payment would be released by NHAI only after the award attains finality.
3. The admitted facts of the case are that a notification under Section 3A of the National Highways Act, 1956 (for short “the Act”), declaring the intention of the Government to acquire the lands was published on 15.12.2009. This was followed by a declaration under Section 3D of the Act, which was published on 14.12.2010.
4. The Competent Authority determined that a sum of Rs.12,916/- per sq. mtrs. was the compensation payable to the landowner. This order determining the compensation was passed under Section 3G (1) of the Act on 05.12.2011.
5. This amount determined by the Competent Authority was not acceptable to the NHAI and hence it invoked its right to seek for determination of the amount payable as compensation by the Arbitrator i.e., by the - 4 - WP No.104106/2022 Deputy Commissioner, by making an application under Section 3G (5) of the Act.
6. In these proceedings, the landowner also challenged the amount determined by the Competent Authority as being inadequate and sought for re- determination of the amount 7. The Arbitrator, on 16.02.2013, modified the award of the Competent Authority and proceeded to award a sum of Rs.14,64,545/- per acre in respect of dry lands and a sum of Rs.30,00,000/- per acre for the converted lands.
8. Being aggrieved by the said modification of the award by the Arbitrator, the petitioner-landowner filed two applications seeking for setting aside the award under Section 34 of the A & C Act read with Section 3G (6) of the Act. One application was filed challenging the reduction of the market value and another application was filed - 5 - WP No.104106/2022 challenging the dismissal of their counter-claim made for enhancement before the Arbitrator.
9. The District Court, by its order dated 10.04.2014, and in the exercise of its power under Section 34(4) of the A & C Act directed the Arbitrator to hold an enquiry and give findings on the points mentioned in the order, while keeping the application filed under Section 34 of A & C Act pending.
10. Pursuant to the said order of the District Court, the Arbitrator proceeded to conduct an enquiry and passed an order dated 14.10.2015.
11. The District Court thereafter proceeded to consider the application filed under Section 34 of A & C Act and by an order dated 16.03.2019, set aside the order passed by the Arbitrator, by which he had reduced the compensation payable and thereby confirmed the order of the Competent Authority which had determined compensation payable at Rs.12,916/- per sq. mtr.-. 6 - WP No.104106/2022 12. Being aggrieved, NHAI preferred appeals to this Court. In these appeals, the landowner also filed Cross Objections. This Court, by an order dated 01.10.2020, allowed the appeals of the NHAI and remanded the matter to the Arbitrator for determination of the amount payable as compensation. The Cross Objections of the landowners were dismissed as withdrawn.
13. Pursuant to the said order of remand, the Arbitrator, by his order dated 03.02.2022, dismissed the application filed by the NHAI and thereby confirmed the award of the Competent Authority. The Arbitrator also directed the Competent Authority to extend the statutory benefits of solatium, additional market value and interest as provided under the provisions of the Land Acquisition Act.
14. Thus, the order of the Competent Authority determining compensation payable at Rs.12,916/- per sq. mtrs. was affirmed by the Arbitrator on 03.02.2022.-. 7 - WP No.104106/2022 15. The landowner thereafter filed an application for correction of certain errors in the award on 10.02.2022 and the said application was allowed, and the errors were corrected by the District Court on 11.02.2022.
16. Thereafter on 08.03.2022, NHAI filed an application under Section 33(1)(a) of the A & C Act to modify the award.
17. The landowner also filed an application under Section 33(4) of the A & C Act seeking for modification of the award and sought for a grant of 50% additional amount over & above the market value.
18. The petitioner, during the pendency of these applications, also made an application on 06.05.2022 seeking for release of the compensation deposited to the Competent Authority. The Competent Authority, however, refused to make the payment by issuing an endorsement dated 20.05.2022 at Annexure-F.-. 8 - WP No.104106/2022 19. It is also pertinent to state here that the application that had been filed by the NHAI and the application filed by the petitioner seeking for modification of the award were both dismissed by the Arbitrator on 04.07.2022.
20. The landowner thereafter made one more application seeking for release of the compensation amount. However, the Competent Authority issued an endorsement dated 20.09.2022 at Annexure-F1, once again refusing to make the payment.
21. This endorsement dated 20.09.2022 at Annexure-F1 and the earlier endorsement dated 20.05.2022 at Annexure-F are the subject matter of challenge in this writ petition.
22. It is also stated by the landowner (in his synopsis) that a review petition that had been filed in August-2022 seeking for review of the order passed by the - 9 - WP No.104106/2022 Arbitrator on 04.07.2022, by which, the application filed by the landowner and NHAI, was dismissed.
23. It is also stated that NHAI has filed an application under Section 34 of the A & C Act challenging the award of the Deputy Commissioner dated 03.02.2022, by which, the award of the Competent Authority was confirmed. It is stated that in these applications filed under Section 34 of the A & C Act, a prayer has been made for a stay of the award of the Arbitrator and the same is yet to be considered.
24. It is also stated that the landowner has also filed an application under Section 34 of the A & C Act and the same is also pending adjudication.
25. The case urged by the petitioner-landowner is that the Competent Authority has no jurisdiction to refuse payment of compensation after passing the award. It is contended that the statutory Rules require the compensation determined by the Competent - 10 - WP No.104106/2022 Authority should not only be deposited immediately but should also be immediately disbursed. It is contended that the Competent Authority does not have the power to withhold the compensation for any reason whatsoever, and at any rate, it does not have the power to seek for the consent of the NHAI to disburse the compensation amount.
26. The NHAI, on the other hand, contends that when it still had time to file an application seeking for setting aside the award under Section 34 of the A & C Act, it had a right to demand the Competent Authority not to disburse the compensation amount, since the application filed by NHAI to set aside the award would be frustrated. It is contended that under the statutory Rules, NHAI is obliged to deposit the compensation amount only if a decision is taken not to challenge the award.
27. It is contended that once a decision is taken to challenge the award, there would be no liability to deposit the compensation amount and since admittedly an - 11 - WP No.104106/2022 application had been filed seeking for setting aside the award, the Competent Authority was perfectly justified in refusing the payment of compensation.
28. The questions that are, therefore, required to be considered in this writ petition are as follows: (i) Whether the Competent Authority possess the jurisdiction to refuse payment of compensation awarded to the land-loser?. (ii) Whether the Competent Authority can seek for the opinion of the Executing Agency for disbursal of the compensation and refuse payment based on the opinion of the Executing Agency?.
29. An overview of the provisions of the Act would be necessary for the determination of the aforementioned.
30. The Act has been enacted to provide for the declaration of certain Highways to be National Highways and for matters connected therewith.-. 12 - WP No.104106/2022 31. Section 2 of the Act provides for the declaration of certain Highways to be National Highways and Sections 3A to 3J relate to the acquisition of lands for the purpose of the Act.
32. The scheme of the Act is that a notification is issued declaring the intention of the Government to acquire the lands for the purpose of a National Highway (Section-3A) and thereupon power has been conferred on a person authorized to enter the land for making a survey (Section-3B).
33. The Act contemplates that any person interested in the lands can file objections and thereby object to the acquisition. On such objections being filed, the Competent Authority is required to give an opportunity of hearing to the objector or his counsel and thereafter make an order to either allow the objections or disallow the objections (Section-3C).-. 13 - WP No.104106/2022 34. On an order being passed disallowing the objections, a report is required to be submitted to the Central Government and on receipt of the report, the Central Government is required by way of a notification in the Official Gazette to declare that the lands should be acquired. On the publication of the declaration, the lands stand vested absolutely in the Central Government free from all encumbrances (Section-3D).
35. On the land vesting in the Central Government and the amount determined by the Competent Authority with respect to the land has been deposited, the Competent Authority is required, by issuing a notice in writing, to direct the owner or any other person, who is in possession, to surrender or deliver the possession and on the failure of the said person, the Competent Authority, is empowered to inform the Commissioner of Police or Collector of the District, who shall thereafter be required to enforce the surrender (Section-3E).-. 14 - WP No.104106/2022 36. The Act requires that in respect of the lands which are acquired, the determination of amounts payable as compensation is required to be made by an order of the Competent Authority. The Competent Authority before determining the amount is required to issue a public notice and after hearing the interested persons, determine the amount payable as compensation for the acquired lands [Section-3G(3)]..
37. If the amount determined by the Competent Authority is unacceptable to either of the parties, the amount shall on an application by either of the parties be determined by the Arbitrator [Section-3G(5)]..
38. Both the Competent Authority and the Arbitrator are required to take into consideration the factors mentioned in Section 3-G (7) of the Act while determining compensation.
39. The Act stipulates that, before taking possession of the land, the amount determined under - 15 - WP No.104106/2022 Section 3-G of the Act, that is either by the Arbitrator or by the Competent Authority should be deposited by the Central Government in such a manner as may be prescribed by the Rules with the Competent Authority.
40. For the purposes of this case, Section 3H of the Act11 would be relevant.
41. The Act also requires that as soon as the amount has been deposited, the Competent Authority shall on behalf of the Central Government pay the amount to the person or persons entitled thereto.
42. If, however, there are several persons claiming to have an interest in the amount deposited, the Competent Authority is required to determine, in his opinion, as to the persons, who are entitled to receive an amount. If there is a dispute regarding the apportionment, the Competent Authority is required to refer the dispute to 1 Section 3H of the Act is extracted at the end of the judgment at page Nos.41 & 42 - 16 - WP No.104106/2022 the Civil Court within whose jurisdiction the land acquired is situate [Section-3H (3) & (4)]..
43. The Act specifically provides that in cases where the amount determined by the Arbitrator is in excess of the amount determined by the Competent Authority, the Arbitrator is entitled to award interest at the rate of 9% p.a. on such excess amount from the date of taking possession till the date of actual deposit. [Section-3H(5)].
44. It also stipulates that where the amount determined by the Arbitrator is more than the amount determined by the Competent Authority, that excess amount along with interest, should be deposited by the Central Government in the manner laid down by the Rules made in this behalf.
45. It also stipulated that the provisions relating to the payment of the amount to the person entitled to or the determination as to who was entitled to receive the compensation or reference to the Civil Court if there was a - 17 - WP No.104106/2022 dispute, shall be as is provided for in cases where the determination is made by the Competent Authority under Section 3G [Section-3H (6)]..
46. The intent of the statutory rule is that irrespective of whether the amount was determined by the Competent Authority as compensation payable to the land loser or the amount was determined by the Arbitrator, that amount is required to be deposited by the Central Government before the Competent Authority in the manner laid down by Rules specified in that behalf. Once a statutory rule has been prescribed for the deposit of the amount determined, the beneficiary i.e., the NHAI is bound to comply with it and it has no right to withhold the deposit.
47. In fact, in both cases, the statutory provision also stipulates the amount deposited before the competent authority is required to be paid immediately on deposit to the person or persons entitled to it and the Competent - 18 - WP No.104106/2022 authority is given no discretion in the matter of payment of compensation 48. It should be borne in mind that possession of the land is permitted to be taken under Section 3E (1), only after the amount determined as compensation has been deposited as provided under Section 3H(1).
49. Thus, the requirement of depositing the amount determined as compensation and its disbursal to the person concerned is statutorily provided and would thus have to be followed scrupulously and no deviation from the Rules would be permissible.
50. The Central Government, in the exercise of powers conferred under the Act has framed Rules in 1998, which were repealed and replaced by a new set of Rules in 2019. For having a comprehensive understanding of the issue, both the Rules would have to be examined and considered.-. 19 - WP No.104106/2022 51. In 1998, the National Highways (Manner of Depositing the Amount by the Central Government with the Competent Authority for Acquisition of Land) Rules, 199822 was framed.
52. Under the 1998 Rules i.e., till the 2019 Rules came into force, the statutory Rules required that the Executing Agency (i.e., the National Highways Authority of India in the case of National Highways) should deposit the amount determined by the Competent Authority or by the Arbitrator under Section 3G of the Act, with the competent authority, by way of a Demand Draft within a period of 7 days from the date of such determination.
53. Thus, the NHAI is required, by law, to deposit within a period of 7 days with the competent authority, by way of a demand draft, the amount determined as compensation by the Competent Authority or by the Arbitrator. 2 The National Highways (Manner of Depositing the Amount by the Central Government with the Competent Authority for Acquisition of Land) 1998 is extracted at the end of the judgment at page no.42.-. 20 - WP No.104106/2022 54. The statutory mandate of Section 3H of the Act, read with the Rules framed regarding deposit fundamentally demand that the amount determined as compensation is deposited within a week. The lawmakers were aware that the NHAI did have an option to approach the Arbitrator, if the amount determined by the competent authority was unacceptable to it and yet it chose to prescribe a time limit of 7 days to deposit. This statutory intent, therefore, excludes any option being given to the NHAI to withhold or delay the deposit of compensation.
55. It may be pertinent to notice here that the NHAI has not been given the option to withhold the deposit, if it is contemplating a challenge to the amount determined either by the Competent Authority or by the Arbitrator and the NHAI is simply required to deposit the compensation determined within 7 days by way of a Demand Draft.
56. Furthermore, on the deposit being made within 7 days of the determination as aforesaid, as required by - 21 - WP No.104106/2022 the statutory mandate of Section 3H(2) of the Act, the Competent Authority is also obliged to pay the amount to the person or persons entitled on behalf of the Central Government. The legislature by using the expression “As soon as may be after the amount has been deposited” has made it crystal clear that the disbursal of the compensation cannot and should not be delayed.
57. It is thus clear from the statutory scheme, the amount determined as compensation by the competent authority is not only to be deposited within 7 days before the competent authority but is also required to be disbursed immediately thereafter to the landowner.
58. The intent behind this prescription of deposit within 7 days and payment immediately thereafter in explicit terms is rather clear. The Legislature was conscious of the fact that the acquisition of land was always a tedious and time-consuming process and to speed up this process, the Act provided for vesting of the land immediately after the declaration was made.-. 22 - WP No.104106/2022 59. It was also aware that obstacles would be laid by the land loser if payment of compensation was delayed and it hence imposed arbitration statutorily as the mode of determining the compensation and significantly, it stipulated a statutory mandate, that the compensation should be deposited within 7 days of the determination by the Competent Authority and should also be disbursed to the land loser immediately thereafter.
60. It should also be kept in mind that, by virtue of Section 3E (1) of the Act, the NHAI cannot take possession until the amount determined as compensation under Section 3G of the Act is deposited as provided under Section 3H(1) of the Act.
61. Thus, it is imperative, as per the statutory rules framed, that the NHAI should deposit the compensation within 7 days of the determination by way of a demand draft with the Competent Authority and the said authority is also statutorily obliged to disburse the compensation immediately thereafter.-. 23 - WP No.104106/2022 62. This statutory fiat cannot be defeated by the NHAI on the ground that it has a right to challenge the determination of compensation and unless that right is exhausted, they have an option to withhold payment. It is settled law, that when a statutory procedure is prescribed there can be no deviation from that procedure. This would be true, more so, when it relates to payment of compensation to a person who has lost his land.
63. The consequence of this statutory mandate is that the NHAI cannot delay or withhold the deposit of the amount determined as compensation and on deposit being made, the Competent Authority cannot also delay or withhold the disbursal of the compensation for any reason.
64. The argument, therefore, that NHAI possesses the right not to deposit the compensation, if it has decided to challenge the determination of the amount payable as compensation, is wholly untenable.-. 24 - WP No.104106/2022 65. It is to be kept in mind that when the Rules were framed, the Legislature was obviously aware that NHAI had a right to challenge the determination of the amount payable by the Competent Authority by making an application to the Arbitrator and yet it made a statutory rule that the amount was to be deposited within 7 days of the determination. The NHAI, therefore, cannot escape the obligation of depositing the amount determined by the Competent Authority and the Competent Authority is also obliged to pay the compensation immediately thereafter.
66. The only option available to NHAI to prevent the disbursal of compensation on the determination of the amount payable by the Competent Authority is to obtain an interim order from the Arbitrator restraining the Competent Authority to disburse the amount. The NHAI cannot, therefore, avoid the deposit of the amount and the consequential disbursal on any reason whatsoever.
67. It is also to be noticed that the lawmakers were aware of the fact that the Arbitrator could also award an - 25 - WP No.104106/2022 amount in excess of the sum determined by the Competent Authority, in which event, the liability to pay interest was also prescribed. It also to be noticed that as against such a higher determination of the amount payable as compensation by the Arbitrator, the Legislature was obviously aware that NHAI had a remedy of making an application under Section 34 of the A & C Act and yet it did not provide for an exception to the rule relating to the deposit of the amount determined as compensation within 7 days. Thus, even in cases where the Arbitrator has determined the amount in excess of the amount determined by the competent authority, the NHAI cannot delay or postpone the deposit and the consequential disbursal of the compensation.
68. The only option even in such cases would be for the NHAI to make an application to the District Judge in its application under Section 34 of the A & C Act and seek for a stay of the disbursal of the compensation.-. 26 - WP No.104106/2022 69. It is quite probable that it was not even in the contemplation of the Legislature that the NHAI could be challenging the determination made of the amount payable and therefore, did not provide for a delay in the deposit. But then, this can only be in the realm of speculation.
70. The inescapable conclusion, therefore, is that NHAI is bound to deposit the amount determined as compensation within 7 days of the determination before the Competent Authority and the Competent Authority is immediately thereafter required to disburse the compensation to the land loser as provided under Section 3H(2) to (4).
71. In the instant case, the Competent Authority determined the amount payable as Rs.12,916/- per square meter on 05.12.2011 and consequently, as per the statutory rule prevailing as on 2011 i.e., the 1998 rules, the amount payable ought to have been deposited before the competent authority by way of a demand draft on or - 27 - WP No.104106/2022 before 12.02.2011 and immediately thereafter the said amount was required to be paid by the Competent Authority to the land loser.
72. However, the said amount has not been deposited by the NHAI and the amount has also not been paid to the land loser and there is thus a clear infraction of the statutory rule.
73. In the instant case, the order determining the compensation payable by the Competent Authority, was challenged by the NHAI by approaching the Arbitrator and the Arbitrator by his order dated 16.02.2013 reduced the compensation determined.
74. Thereafter, the decision of the Arbitrator was challenged by making an application under Section 34 of the A & C Act to the District Court and the District Court by an order dated 10.03.2014, after concluding that decision of the Arbitrator suffered from illegalities, while keeping the application under Section 34 of the A & C Act - 28 - WP No.104106/2022 pending, directed the Arbitrator to hold an enquiry and give separate and independent findings regarding the nature of the properties that had been acquired, in the exercise of its powers under Section 34 (4) of the A & C Act.
75. The Arbitrator, pursuant to the said direction, proceeded to record a finding on 14.10.2015 and the District Court thereafter proceeded to set aside the award itself by its order dated 16.03.2019. Thus, the order of the Competent Authority dated 05.02.2011 was confirmed by the District Court on 16.03.2019.
76. This order of the District Court was set aside by this Court on 01.10.2020 and the matter was once again remanded to the Arbitrator and the Arbitrator by his order dated 03.02.2022, has affirmed the order of the Competent Authority and rejected the application filed by NHAI under Section 3G (5) of the Act.-. 29 - WP No.104106/2022 77. An argument is, therefore, advanced that the award became final only on 03.03.2022 and therefore, the 2019 Rules would be applicable.
78. As stated above, the Competent Authority determined the amount payable by his order dated 05.02.2011 and NHAI was basically required to deposit the amount on or before 12.02.2011.
79. However, since there has been continuous litigation relating to the determination of the amount during the pendency of which 2019 Rules have been framed, it would also be necessary to examine whether under the 2019 Rules, there was any exemption provided in the matter of deposit of the compensation.
80. On 18th of January 2019, the 1998 Rules were replaced by the National Highways (Manner of Depositing the Amount by the Central Government; making requisite - 30 - WP No.104106/2022 funds available to the Competent Authority for Acquisition of Land) Rules, 201933.
81. The Rule basically requires the NHAI to ensure a Bank account is maintained with requisite funds, to which the Competent Authority has access and has authorization to withdraw, subject to limits set by NHAI. The Competent Authority is empowered to withdraw from the said account and disburse the compensation to the landowners.
82. Two significant factors are to be noticed in this Rule.
83. The first factor is that the Rule stipulates that when a demand is made by the Competent Authority before the announcement of the award, the NHAI is required to issue authorization limits to the Bank in favour of the Competent Authority for withdrawal and disbursements to the landowners through electronic 3 The 2019 Rules is extracted at the end of the judgment at page no.42 & 43.-. 31 - WP No.104106/2022 banking mechanism. Thus, NHAI is put on notice even before the award is announced to issue instructions to the Bank regarding the limits to which the Competent Authority is authorised to withdraw.
84. The second factor is that the Rule also specifically stipulates that the Competent Authority was entitled to without any reference to the land acquiring agency, for disbursement to the landowners or persons interested. Thus, the Competent Authority is specifically discharged from the obligation to inform NHAI about the disbursal of the compensation, thereby, meaning that NHAI had no role at all to play in the disbursal of compensation.
85. The further inference of the Rule is that the only role of the NHAI is to ensure that the Competent Authority is enabled to withdraw funds from the Bank account to be maintained by NHAI and nothing more.-. 32 - WP No.104106/2022 86. The Rule also goes on to stipulate two timelines to ensure the withdrawal of the amount by the Competent Authority:
87. In case of a determination by the Competent Authority under Section 3G of the Act, the period prescribed is 15 days. In cases, where the NHAI is not aggrieved of the determination, there would no impediment for the deposit.
88. If, however, the order of the Competent Authority was unacceptable to the NHAI and it wanted to make an application to the Arbitrator for determination, NHAI would still, nevertheless, must ensure that the Competent Authority is enabled to withdraw the amount determined by it for disbursal to the landowner, by issuing necessary instructions to the Bank.
89. It should be noticed that in such cases the Rule does not entitle the NHAI to withhold the withdrawal if it decides to approach the Arbitrator. Thus, in cases of - 33 - WP No.104106/2022 determination of the amount payable as compensation is made by the Competent Authority, there is no escape from the need to ensure arrangements are made for the withdrawal by the Competent Authority and it is a must.
90. In case of a determination of the amount by the Arbitrator under Section 3G (7) of the Act, the excess amount together with interest is also required to be deposited within 30 days of the Arbitrator’s award.
91. However, an exception is sought to be made in such a case. The Rule states that “unless such award has been challenged by either of the aggrieved parties” meaning thereby, that the NHAI need not ensure the withdrawal, if within 30 days of the award, the award has been challenged by either of the parties.
92. Thus, if an Arbitrator’s award is not challenged within 30 days from the date of the award, NHAI would be bound to ensure that instructions are in place for withdrawal by the Competent Authority.-. 34 - WP No.104106/2022 93. The consequence of this stipulated timeline is that the NHAI, if it wants to be discharged of the obligation to ensure the facilitation of withdrawal of the amount by the Competent Authority will have to necessarily file an application under Section 34 of the A & C act, challenging the award of the Arbitrator within 30 days.
94. This, no doubt, may lead to an anomalous situation where the time limit provided for making an application under Section 34 of the A & C Act to challenge the award is sought to be curtailed or reduced. However, on closer scrutiny, this would not be true. This is because the time limit stipulated to the NHAI under this Rule is to only ensure the Competent Authority is facilitated to withdraw and disburse the compensation and not for challenging the award.
95. If the NHAI wants to be discharged of the obligation to facilitate the withdrawal, then, it would have to make an application under Section 34 of the A & C Act - 35 - WP No.104106/2022 within 30 days of the award made by the Arbitrator. If NHAI does not make an application under Section 34 of the A & C Act within 30 days, it will invite the statutory obligation to facilitate the withdrawal of the compensation amount by the Competent Authority. This, therefore, does not in any way alter the time limit for challenging the award under Section 34 of the A & C Act.
96. Having regard to the fact that the Act is a special statute, whereby arbitration is statutorily imposed, the prescription of a distinct timeline would also be permissible.
97. However, in the present case, this provision relating to deposit pursuant to the award of the Arbitrator will not arise at all. This is because, under the Rules, the requirement to deposit within 30 days would arise only if the amount awarded by the Arbitrator is in excess of the amount determined by the Competent Authority. In this case, the Arbitrator has only confirmed the order of the Competent Authority awarding Rs.12,916 per sq. mtr. and - 36 - WP No.104106/2022 it has not awarded any amount in excess of the amount awarded by the Competent Authority. Thus, the question of applying this exception to withhold payment of compensation would not at all arise.
98. As a consequence, the argument of NHAI that it had the option of withholding the compensation since it had decided to challenge the award passed by the Arbitrator is without any merit and deserves to be rejected.
99. It is no doubt true, that the provisions of the Act may amount to frustrating the right of NHAI to challenge the award of the Arbitrator, if the land loser is permitted to withdraw the amount. However, if the statute, by clear and express terms, contemplates a withdrawal of the compensation even before the time limits to challenge the award expires, the said statutory mandate cannot be nullified.-. 37 - WP No.104106/2022 100. The only option available to NHAI in such cases is to ensure that it challenges the order of the Competent Authority within 15 days or within 30 days from the date of the award of the Arbitrator and obtain an interim order restraining the Competent Authority from disbursing the compensation. If this is not done by NHAI, the inevitable consequence would be that the Competent Authority should be facilitated to withdraw the amount and disburse the same to the land loser.
101. In this case, the Competent Authority passed its order determining the compensation on 05.02.2011 and the amount was required to be deposited on or before 12.02.2011 as per the 1998 Rules. This, has however, not been done.
102. The Arbitrator, after the order of remand, passed his award on 16.03.2019 rejecting the claim of NHAI and upholding the order of the Competent Authority. Thus, NHAI was required to facilitate the withdrawal by - 38 - WP No.104106/2022 the Competent Authority within 30 days i.e., on or before 15.04.2019.
103. As stated above, this date of passing of the Arbitrator’s award on 16.03.2019 would not be relevant for the deposit, since the Arbitrator did not award any amount in excess of the amount determined by the Competent Authority.
104. Lastly, the District Court dismissed the application filed by NHAI on 03.02.2022 and the applications for correction, etc., were also dismissed on 04.07.2022 and assuming for the sake of argument, that 04.07.2022 is the starting point, even then, NHAI was required to ensure the withdrawal of the compensation amount by the Competent Authority on or before 03.08.2022.
105. Admittedly, NHAI has failed to ensure the deposit was made within 7 days of the original decision of the Competent Authority i.e., before 12.02.2011.-. 39 - WP No.104106/2022 106. The NHAI has also not ensured that the Competent Authority was enabled to withdraw the amount within 30 days from 04.07.2022, the date of the Arbitrator’s award and admittedly no interim order has been granted by the District Court restraining the Competent Authority to disburse the compensation.
107. The NHAI has, on the other hand, contended that it had a right not to release the payment since the applications filed under the A & C act were still pending adjudication. This is clearly impermissible for the reasons enumerated above.
108. In this view of the matter, it is hereby held that the Competent Authority does not possess the jurisdiction to refuse payment of compensation awarded to the land- loser and the Competent Authority cannot also seek for the opinion of the Executing Agency for disbursal of the compensation and refuse payment based on the opinion of the Executing Agency.-. 40 - WP No.104106/2022 109. Consequently, the impugned endorsements dated 20.05.2022 and 20.09.2022 at Annexures-F and F1 respectively issued by the Competent Authority to refuse payment cannot be sustained and the same are quashed.
110. The NHAI shall, therefore, discharge its statutory obligation to facilitate the Competent Authority to withdraw the compensation amount determined by the Competent Authority and disburse the compensation to the land loser.
111. Since the NHAI has withheld the compensation payable to the landowner, it would have to necessarily be liable to pay interest on the compensation which became payable from 12.02.2011 till the date of payment. Since Section 3H(5) of the Act prescribes interest at 9% per annum on the excess amount awarded by the Arbitrator, in my view, it would be just and proper to direct NHAI to pay interest at 9% per annum on the compensation amount determined by the Competent Authority from - 41 - WP No.104106/2022 12.02.2011 i.e., the date which it became payable till the date of payment.
112. The NHAI is directed to ensure that this entire process of payment of compensation to the petitioner- landowner is completed within 30 days from the date of receipt of this order. Writ Petition is accordingly allowed. SD JUDGE13H.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 shall on behalf of the Central Government pay the amount to the person or persons entitled thereto. (3) Where several persons claim to be interested in the amount deposited under sub-section (1), the competent authority shall determine the persons who in its opinion are entitled to receive the amount payable to each of them. (4) If any dispute arises as to the apportionment of the amount or any part thereof or to any person to whom the same or any part thereof is payable, the competent authority shall refer the dispute to the decision of the principal civil court of original jurisdiction within the limits of whose jurisdiction the land is situated. (5) Where the amount determined under section 3G by the arbitrator is in excess of the amount determined by the competent authority, the arbitrator may award interest at nine per cent. per annum on such excess amount from the date of taking possessions under section 3D till the date of the actual deposit thereof.-. 42 - WP No.104106/2022 (6) Where the amount determined by the arbitrator is in excess of the amount determined by the competent authority, the excess amount together with interest, if any, awarded under sub-section (5) 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 and the provisions of sub-sections (2) to (4) shall apply to such deposit. 2 G.S.R. 12(E)- In exercise of the powers conferred by clause (aa) of sub-section (2) of section 9 of the National Highways Act, 1956 (48 of 1956), the Central Government hereby makes the following rules, namely:- 1. Short, title and commencement:- (1) These rules may be called the National Highways (manner of depositing the amount by the Central Government with the competent authority for acquisition of land) Rules, 1998. (2) They shall come into force on the date of their publication in the Official Gazette.
2. The manner of depositing money with the competent authority,- (1) Subject to the provisions of the Act, the executing agency authorised by the Central Government in this behalf shall deposit,- (a) the amount determined under section 3G of the Act, and (b) where the amount determined by the arbitrator under Section 3G of the Acts is in excess of the amount determined by the competent authority, the excess amount together with interest, if any, awarded by the arbitrator, within seven days of such determination or award by the competent authority or by the arbitrator, as the case may be, with the competent authority through demand draft. (2) The competent authority shall deposit the amount received under sub-rule (I) in a separate Public Deposit Account in the Public Account of India and the provisions of sub-sections (2) to (4) of section 3H of the Act shall apply to such deposit. Explanation- For the purpose of this rule,- (a) 'Act' means the National Highways Act, 1956 (48 of 1956) (b) the expression 'executing agency' shall have the same meaning as assigned to it under clause (d) of rule 2 of the National Highways Rules, 1957. 3 2019 Rules- (3) The manner of making requisite funds available to the competent authority shall be as follows:- (i) Subject to provisions of the Act, the executing agency authorised by the Central Central Government in this behalf, shall open and maintain an account with one or more Scheduled Commercial Banks for remittance of the amount for land acquisition across the country, with arrangements for access to such account by the competent authority for specific jurisdiction as per authorisation of limits by the executing agency. The executing Agency shall, on the demand raised by the competent authority before announcement of the Award, issue requisite authorisation limits in favour of the competent authority for withdrawal of amount from such account as per requirement from time to time for disbursement to the landowners or persons interested therein through an electronic banking machanism as per extant Reserve Bank of India regulations and the said authorisation limits, revolving in nature, shall entitle the competent authority to withdraw money from such account as per requirements, without any further reference to the land acquiring agency, for disbursement to the landowners or persons interested therein, as follows:- - 43 - WP No.104106/2022 (a) The amount determined under section 3(G) of the Act within fifteen days of the raising of demand by the competent authority, and (b) Where the amount determined by the Arbitrator under sub- section (7) of Section 3G of the Act is in excess of the amount determined by the competent authority, the excess amount, together with interest, if any, awarded by the Arbitrator, within 30 days of the communication of Arbitrator's award, unless such Award has been further challenged by either of the aggrieved parties. Explanation: The authorisation limits, revolving in nature, are explained with the help of an illustration as under:- Say, the amount of award is Rs.200 crore for which the CALA places demand on the acquiring/executing agency. The executing agency shall issue an authorisation in favour of CALA to draw an amount up to Rs.200 crore from the Central account, in limits of Rs.50.00 crore at any point in time. As the CALA keeps disbursing the amount, the limit of Rs.50.00 crore shall keep getting automatically recouped and so on till the utilisation of total amount of authorisation of Rs.200 Crore. (ii) The executing agency, authorised by the Central Government in this behalf, shall ensure that the requisite account is maintained with a Scheduled Commercial Bank, against which an authorisation limit is issued in favour of the competent authority for disbursement of the compensation amount, duly determined under Section 3(G) of the Act, to the landowners or persons interested therein. Further, the said authorisation limit shall be utilised by the competent authority for the intended purpose of disbursement and shall be duly reflected in the books of accounts of the executing agency for the purpose of proper monitoring the reconciliation thereof and any interest earned therein shall be credited into the said account and shall belong to the executing agency. (iii) In cases where the executing agency of a project is any State Government of Union territory, the amount shall preferably be disbursed through the Public Financial Management System of the Ministry of Finance. (iv) The competent authority shall, in turn, disburse the compensation amount to the landowners of the persons interested therein preferably by electronically crediting the said amount into their respective bank accounts. SD JUDGE Vnp/pks*