2019 (8) TMI 1227 - SC - Indian Laws

Maintainability of application - whether the application under Section 11 of the Arbitration and Conciliation Act, 1996 is maintainable in view of Section 3G(5) of the National Highways Act, 1956 which provides for appointment of an Arbitrator by the Central Government? - HELD THAT In view of the power being vested exclusively with the Central Government to appoint an Arbitrator under Section 3G(5) of the Act 1956, being a special enactment, the application filed under Section 11(6) of the Act 1996 for appointment of an Arbitrator was not maintainable and provisions of the Act, 1996 could not be invoked for the purpose. As the litigation has consumed a sufficient long time, we consider it appropriate to further observe that the Arbitrator so appointed by the Central Government may adjudicate and decide the dispute within a reasonable time but in no case later than six months after the respondent applicant record its presence in the proceedings. Appeal allowed.

Summary

Issues Involved:
1. Maintainability of the application under Section 11 of the Arbitration and Conciliation Act, 1996 in view of Section 3G(5) of the National Highways Act, 1956.
2. Jurisdiction and authority for the appointment of an Arbitrator.
3. Interpretation and application of special versus general law principles.
4. The procedural and substantive implications of delayed appointment of an Arbitrator by the Central Government.

Detailed Analysis:

1. Maintainability of the Application under Section 11 of the Arbitration and Conciliation Act, 1996:

The core issue was whether an application under Section 11 of the Arbitration and Conciliation Act, 1996 ("Act 1996") is maintainable in light of Section 3G(5) of the National Highways Act, 1956 ("Act 1956"). The Supreme Court held that the Act 1956 is a special enactment with a comprehensive code for land acquisition and compensation determination. Section 3G(5) specifically mandates that an Arbitrator must be appointed by the Central Government. Therefore, the application under Section 11 of Act 1996 was not maintainable.

2. Jurisdiction and Authority for the Appointment of an Arbitrator:

The High Court of Calcutta had appointed an Arbitrator under Section 11(6) of Act 1996, which was contested. The Supreme Court clarified that the Central Government exclusively holds the power to appoint an Arbitrator under Section 3G(5) of Act 1956. This specific provision overrides the general provisions of Act 1996. The High Court's appointment of an Arbitrator was thus deemed invalid.

3. Interpretation and Application of Special versus General Law Principles:

The Supreme Court emphasized the principle that special law prevails over general law. Act 1956, being a special law, has an inbuilt mechanism for arbitration, and Section 11 of Act 1996 cannot be invoked for appointing an Arbitrator in matters governed by Act 1956. The Court reinforced this by referencing the case of General Manager (Project), National Highways and Infrastructure Development Corporation Ltd. Vs. Prakash Chand Pradhan & Ors., which held that Act 1956 provides an exclusive mechanism for arbitration, excluding the application of Section 11 of Act 1996.

4. Procedural and Substantive Implications of Delayed Appointment:

The respondent had filed an application for the appointment of an Arbitrator to the Central Government, which did not respond within 30 days. Consequently, the respondent approached the High Court for relief under Section 11(6) of Act 1996. The Supreme Court noted that while there is no statutory limitation for the Central Government to appoint an Arbitrator under Section 3G(5) of Act 1956, it must be done within a reasonable time. If the Central Government fails to act, the aggrieved party can seek remedy through writ jurisdiction or civil court, but not under Section 11 of Act 1996.

Conclusion:

The Supreme Court set aside the High Court's orders dated 6th July 2007 and 27th August 2007. It directed the Central Government to appoint an Arbitrator within 30 days and ensure the arbitration is completed within six months. The judgment underscores the precedence of special legislation over general laws in arbitration matters under the National Highways Act, 1956.