1 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
IN THE COURT OF THE SPECIAL JUDGE FOR TRIAL AND DISPOSAL OF
COMMERCIAL DISPUTES, VISAKHAPATNAM
Present: Sri M.TIRUMALA RAO
III Addl. District Judge-cum-
Special Judge for SPE & ACB Cases
FAC.SPECIAL JUDGE FOR TRIAL & DISPOSAL OF COMMERCIAL DISPUTES,
VISAKHAPATNAM
Saturday, this the 22nd day of October, 2022
C.A.O.P.NO.31/2019 (OLD AOP.NO.621/2014)
Between:
Vallampati Krishna Prasad, S/o.Varaha Narasimham, aged 50 years, Business, r/at.Flat No.C-104, VUDA Apartment, HB Colony, Visakhapatnam-530022 …. Appellant
And:
1. The National Highway Authority of India, Visakhapatnam represented by Project Director
2. The Special Deputy Collector, (L.A.), NH5, Visakhapatnam ….Respondents
3. District Collector and Sole Arbitrator, Maharanipeta, Visakhapatnam-530002 ….Respondent/ Arbitrator
This Appeal came before me on 17.10.2022 for final hearing in the presence of Sri M.Ramdas, Advocate for appellant; and of Sri K.Madhusudana Rao, Advocate for R.1 and Government Pleader, for the Respondents 2 and 3 and having considered the matter till this day, this Court made the following:
O R D E R
1.This is Arbitration Appeal filed by the appellant under Section 34 of Arbitration and Conciliation Act, 1996, praying the court to set aside the Award No.1/2012, dated 10.10.2012 passed by third respondent/ District Collector who was appointed as arbitrator under Section 3(G)(5) of National Highways Authorities Act 1956; for costs and other ancillary reliefs.
2.It is averred in the Arbitration Appeal that appellant is an absolute owner of his house site in Survey No.30/1 and 2 situated adjacent to National Highway No.5, in Madhurawada within the limits of Greater Visakhapatnam Municipal Corporation. While so by notification, dated 03.03.2002 issued by the second respondent herein a part of house plot of the applicant measuring an 2 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
extent of 242 Square Yards was notified for acquisition under the National Highways Authorities Act, 1956 for widening of the national highway No.5.
3.It is also averred that the said land is duly acquired and compensation @ of Rs.379/- per square yard after deducting 1/3rd valued which is formal practice in the case of undeveloped land, was passed an award for the same by the second respondent herein to the applicant by passing Award No.31/2002, dated 05.09.2002. The deduction is unwarranted for developed lands and for approved house plots. Remedy of the parties who are dissatisfied with the amount of compensation award by the second respondent/ Special Deputy Collector herein is to seek for arbitration by Sole Arbitrator appointed by the Central Government under Section 3(G)(5) of National Highways Authorities Act 1956. Accordingly Ministry of Road Transport and Highways, Government of India appointed the third respondent herein as a sole arbitrator for adjudicating the claims for compensation by those dissatisfied by the award of the second respondent. The applicant and other effected parties sought for arbitration by the third respondent herein. The same was not heard and disposed of for many years. Then the applicant and others approached the
Hon'ble High Court of A.P in Writ Petition No.15761 of 2011 wherein the Hon'ble
High Court directed third respondent to hear and pass an award within six weeks. As the order was not complied with, the applicant filed a contempt petition and only thereafter the matter was heard that too not by the third respondent/ Arbitrator but by the Joint Collector who is not the notified authority to hear the matter. Accordingly the Joint Collector heard the matter on 29.05.2010, 21.08.2010, 27.09.2011, 28.04.2012, 15.09.2012 and 29.09.2012. Thereafter the third respondent passed the impugned Award No.1/2012 on 10.10.2012 and communicated the same to the applicant by post on 29.10.2012.
4.It is also contended that the award passed by the third respondent District Collector/ Arbitrator is contrary to the basic principles of audi altarem partem and the provisions of Arbitration and Conciliation Act, 1996 in as much as he did not hear the matter at all but directed the Joint Collector to hear the matter. Thereafter on the basis of note allegedly prepared by the paishy of Joint Collector the Award was passed mechanically without application of mind. The same is also contrary to the provisions of Arbitration and Conciliation Act, 1996. The third respondent / District Collector, having been appointed as an Arbitrator by the competent authority has no power to delegate his authority to another, more particularly when he has to pass a judicial order. The third respondent is also bound by the substantial loss of the land while passing the award which is totally ignored. More over passing of a consolidated award in respect of each claim of twenty land owners who owned lands at different places is also not valid under law. As such award is liable to set aside. It is said in the award passed by the third respondent is a consent award. There is no consent given by the applicant. Hence this petition.
5.The contention of first respondent / National Highway Authority of India and also contention of Special Deputy Collector, National Highway No.5, Visakhapatnam are one and the same, that as per the directions of the Government of India, R.3/ District Collector was appointed as Arbitrator who after followed due procedure passed an award is tenable, sustainable under Law. All the awardees including the appellant agreed for passing award and it is 3 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
a consent award. Appeal grounds are vague and appeal is liable to be dismissed with costs.
6. Now the simple points which emerges for determination under O.41 R.31 of CPC are:
1. Whether R.3 who is District Collector being Sole Arbitrator is empowered to pass impugned award by delegating his power to Joint Collector, Visakhapatnam or not ?
2. Whether R.3 District Collector being Arbitrator infact
conducted personal hearings of arbitration case or not ?
3. Whether R.3 District Collector being Arbitrator is empowered under the Law to delegate his powers to Joint
Collector to hear the matter and parties or not ?
4. Whether the impugned award passed by the R.3/ District Collector is liable to be set aside on the ground that R.3/ District Collector delegated his powers to JC against the provisions of Section 3(G)(5) of National Highways Authorities Act or not ?
5. Whether by the Acts of passing award, the rights of the appellant and other awardees are violated, infringed, transgressed and impugned award is liable to set aside or not ?
6. Whether this court being a Commercial Court has got jurisdiction to entertain the present appeal in view of the specific provisions of Section 2(e) of Arbitration and Conciliation Act 1996 or not ?
7. To what relief ?
7.To prop-up the contentions of both the parties, no oral and documentary evidence was let in by both the parties. This court being Appellate court, under Section 34 of the Act summoned Arbitration record and received the same and perused the same. The learned Government Pleader for R.2 and R.3 and Standing Counsel for R.1 Project Director have filed their written arguments along with citations and perused them. Heard both sides.
POINT NOS.1 to 7:
8.Sri M.R.D, Counsel for the appellant submitted that applicant is absolute owner of house site in Survey No.30/1 and 2 situated adjacent to National Highway No.5, in Madhurawada within the limits of Greater Visakhapatnam Municipal Corporation. While so by notification, dated 03.03.2002 issued by the second respondent herein a part of house plot of the applicant measuring an extent of 242 Square Yards was notified for acquisition under the National Highways Authorities Act, 1956 for widening of the national highway No.5. While enjoying the same by the applicant, the Government of India gave a notification acquiring applicant's lands as well lands of others for widening of National Highway-5 and fixed compensation of Rs.379/- through R.2 per square yard and passed award by the 2nd respondent/ Arbitrator and dissatisfied with the award passed by the 2nd respondent, the 4 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
Government of India appointed District Collector R.3 herein under Section 3(G) (5) of National Highway Authority 1956, conducted Arbitration Proceedings not by hearing parties by himself but by delegating his powers to Joint Collector who conducted hearing of the matter and parties on six occasions and as per the instructions of Joint Collector, R.3/ District Collector passed a impugned award which is under challenge by the applicant in this Appeal under Section 34 of Arbitration and Conciliation Act of 1996. As per the provisions of Section 3(G)(5) of National Highways Authorities Act 1956, R.3/ District Collector was appointed as an Arbitrator and he has no power to delegate his power to hear the matter and decide the matter, cannot be deferred and cannot be delegated to Joint Collector, Visakhapatnam and further contended that since Joint Collector, Visakhapatnam conducted all the proceedings and confirmed an opinion and basing on that opinion, R.3/ District Collector passed impugned award by enhancing rate per square yard from Rs.379/- to Rs.551/-. Hence the applicant was advised to file the present Appeal under Section 34 of Arbitration and Conciliation Act 1996 and challenged the findings of R.3/ District Collector/ Arbitrator and he prays to set aside the award and allow the Appeal.
9.Learned Government Pleader for Government/ R.2 and R.3 and Sri K.M.R, Counsel for 1st respondent submitted that when a land was acquired for winding of N.H-5 road from the applicant as well as others, the Government appointed R.2 to fix the rate per square yard and land was acquired for the purpose of winding of N.H-5 road. The applicant is being dissatisfied with the amount granted by the 2nd respondent, they moved Arbitrator before R.3/ District Collector for enhancement of amount of Rs.379/- awarded by R.2 is not adequate and not sufficient and when challenged the same, the Government of India under Section 3(G)(5) of National Highways Authority Act referred the case of the petitioner and others for arbitration by appointing R.3/ District Collector, Visakhapatnam, as a sole Arbitrator who conducted arbitration proceedings by calling all the parties and by hearing them and collecting documentary evidence and passed impugned award under law by enhancing amount of compensation of Rs.379/- per square yard fixed by the R.2 to Rs.551/- for which the petitioner as well as all the awardees are given consent agreeing to receive Rs.551/- and the award passed by the R.3/ Arbitrator is a consent Award and the same was mentioned in the contents of the Award and counsels also submitted that while conducting arbitration proceedings by the District Collector, he has taken assistance of the Joint Collector and other staff members are permissible under Section 6 and Section 26 of Arbitration and Conciliation Act 1996, as such there is no delegation of powers of District Collector / R.3/ Arbitrator under law to anyone and the impugned award is a valid one and enforceable under law.
10.The counsels also further submitted that the District Collector/ R.3/ Arbitrator never delegated his powers to his Joint Collector, as such the grounds set out in the Appeal by the petitioner is untenable and baseless and liable to be dismissed with costs.
11.On the other hand, the counsel for the Appellant argued that though District Collector/ R.3 was appointed as Arbitrator by the Government of India u/Sec.3(G)(5) of National Highways Authorities Act while conducting Arbitral proceedings, he delegated his powers to his Joint Collector, who has issued notices to the parties and heard the parties and collected documentary evidence and at fag end of the case as per the opinion formed by the Joint 5 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
Collector, the District Collector pronounced impugned award enhancing the compensation amount of Rs.379/- to Rs.551/- per square yard, and that whatever the things done by Joint Collector never termed under Law as assisting the District Collector/ Arbitrator/ R.3 herein and as per Section 6, no doubt R.3/ Arbitrator is entitled to take assistance of his sub-ordinates and other staff members but does not mean to say that in the absence of District Collector/ R.3/ Arbitrator, Joint Collector is permitted to conduct proceedings and all would goes to establish that it is the Joint Collector personally conducted proceedings till pronouncing Judgment and the entire record produced by R.3/ District Collector/ Arbitrator reveals the above facts, as such the impugned award passed by the District Collector/ R.3 is liable to be vitiated and liable to be set aside.
12.The learned G.P for R.2 and R.3 Arbitrator submitted two rulings held in 2014 (6) ALT 34.1 (DN SC) between State of West Bengal and others Vs. Associated Contractors. Another citation cited in 2018 (4) ALT 511 (DB) held between
Hyderabad Precision Mfg. Co. Pvt. Ltd., Vs. Union of India rep., by the Senior
General Manager and contended that “Only the Principal court as envisaged u/Sec. 2(1)(e) of Arbitration and Conciliation Act, has got jurisdiction to entertain the present Appeal but not this court”.
The counsel for appellant cited six rulings as follows;
1. AIR 1931 All 751 (Para 4) held between Ram Chandra Brij Lal Vs. Manohar Das Ram Prasad
2. AIR 1944 Lah 149 (Paras 3, 16 & 19) held between The Punjab Province Vs. Dr. Lakshmi Dass and Ors.
3. AIR 1953 Cal 646 (Para 13) held between Ramtaran Das Vs. Adhar Chandra Das and Ors.
4. AIR 1954 Pat 27 (Para 11) held between Lachhuman Singh Vs. Makar Singh and Ors.
5. AIR 1964 P & H 424 (Paras 4 & 5) held between Punjab State and Anr. Vs. Chander Bhan Harbhajan Lal and Anr.
6. AIR 2020 SC 2488 (Paras 16 to 19) held between Patel
Engineering Ltd. Vs. North Eastern Electric Power Corporation
Ltd.
and contended that “in view of the Judge made Law the impugned award is not tenable and not legal and liable to be set aside”.
The learned counsel for first respondent cited four decisions as follows :
1. (2012) 1 SCC Pg. 594 held between P.R.Shah, Shares and Stock Brokers Pvt. Ltd. Vs. B.H.H.Securities Pvt. Ltd.,
2. (2015) 3 SCC 49 held between Associate Builders Vs. Delhi Development Authority
3. (2003) 5 SCC 705 held between Oil & Natural Gas Corporation Ltd., Vs. Saw Pipes Ltd.,
4. (2019) 15 SCC 131 held between Sangyong Engineering &
Construction Co. Ltd. V. National Highway Authority of India
(NHAI) 6 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
and seriously opposed that this court being Commercial Court ought not have interfered on Appellant with the findings of the learned Arbitrator who passed consent common Award in respect of the Appellant as well as 19 others.
13.After hearing both sides and perused the record produced by District Collector/ R.3/ Arbitrator thoroughly, the following facts are admitted facts which need not be proved under Section 58 of Indian Evidence Act.
1. There is no dispute that applicant is absolute owner of
two moieties i.e., an extent of 242 Square Yards.
2. There is no dispute that the land of the Appellant in
S.No.30/1 and S.No.30/2 were acquired by the
Government of India under National Highways
Authorities Act 1956 for the purpose of widening of
the NH-5 road.
3. It is not in dispute that after acquisition of Appellant’s
house site to an extent of 242 square yards and as per
the provisions of National Highway Authorities Act,
R.1 fixed compensation amount of Rs.379/- per square
yard to be entitled by the petitioner.
4. There is no dispute that dissatisfied with the said
amount, the appellant being absolute owner referred
this case for enhancement of compensation for
arbitration for which Government of India appointed
the District Collector/ R.3 as Arbitrator u/Sec.3(G)(5)
of National Highways Authorities Act, 1956 as to dwell
into and how much compensation amount is liable and
payable to petitioner.
5. There is no dispute that when there was a delay in
disposal of Arbitral proceedings, the appellant moved
before Hon'ble High Court of A.P by filing Writ Petition
No.15761/2011 wherein the Hon'ble High Court of A.P
directed R.3/ District Collector to dispose of the
matter within six weeks.
6. There is no dispute that the petitioner has received
the compensation amount @ Rs.379/- per square yards
subject to protest as per the directions of the Hon'ble
High Court of Andhra Pradesh in Writ Petition No.
15761/2011.
14.Now the simple points which emerges for consideration as argued by both the parties are concerned :
1) Whether the District Collector/ R.3 who was appointed as
a Sole Arbitrator u/Sec.3(G)(5) of National Highways
Authorities Act 1956 has conducted arbitral proceedings
by summoning the parties and by collecting oral and
documentary evidence and passed impugned award in
A.R.C.No.1/2012 on 10.10.2012 is true, valid,
enforceable, bull-shit or not ?
2) Whether R.3/ District Collector being Arbitrator while
conducting Arbitral Proceedings has taken assistance of
the Sub-ordinates like Joint-Collector, D.R.O and other
staff members etc., which he is entitled to take them as
assistance, as contemplated and permissible u/Sec.6 of
Arbitration and Conciliation Act 1996 or not ?
7 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
3) Whether as contended by the appellant the duties of
Arbitrator/ R.3 are delegated to Joint Collector who has
conducted all the proceedings and put up his considered
opinion or not ?
4) Whether the record produced by R.3/ Arbitrator discloses
any material to show that R.3 delegated his powers to
Joint Collector, Visakhapatnam or not ?
5) Whether the Joint Collector under delegated powers
conducted Arbitral proceedings by calling parties by
issuing notices and by recording evidence and by
collecting documents or not ?
6) Whether the impugned award passed by the R.3 District
Collector / Arbitrator is valid and liable to be vitiated
under law or not ?
7) Whether impugned Award passed by R.3 District
Collector/ Sole Arbitrator is a consent award or not ?
8) Whether this court being Commercial Court has got
Jurisdiction to entertain this Appeal U/Sec.34 of
Arbitration and Conciliation Act or not ?
15.Besides immaterial part, the entire record produced by the District Collector/ R.3/ Arbitrator runs into several pages i.e., Page Nos.1 to 180 in respect of Arbitral proceedings of the Appellant as well as twenty other awardees out of which seven other awardees are applicants in other 7 O.Ps which are under challenge u/Section 34 of Arbitration and Conciliation Act.
16.After hearing both sides and perused the record, and as pointed out the following things are extracted from the record maintained by the R.3/ District Collector/ Arbitrator. Unless the things are extracted from the record of Arbitrator/ District Collector/ R.3 herein, this court being an Appellant Tribunal under Arbitration and Conciliation Act is not in a position to decide the powers of R.3/ District Collector/ Arbitrator is delegated his power to his Joint Collector or not.
PAGE NO.25
8 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
17.Firstly when the above note file was put up for conducting Arbitral proceedings at page No.5, R.3/ Arbitrator/ District Collector is going to hear the parties in the matter on 26.05.2003 at 10.00 A.M at Collectorate Office. Again the matter was adjourned to 13.10.2004 at 10.00 a.m., at Collectorate Office. As seen from another office note, at Serial No.2, Joint Collector put up a file for issuing notices to the parties and hearing, under C.No.2352/2002/G-5 at the end of page No.25 Collector passed an order at Serial No.1 by endorsing J.C to conduct hearing. The services of other staff members who have put up files and subscribed their signatures under Serial Nos.2 to 5 comes under assisting the Arbitrator under Section 6 of Arbitration and Conciliation Act. The insidious Act of R.3/ Arbitrator under Serial No.1 in delegating his power to Joint Collector to conduct enquiry did not come under Assisting the R.3/ Arbitrator under Section 6 of Arbitration and Conciliation Act.
9 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
PAGE NO.27
18.In the above office note file under the same number, dated 21.04.2010 at page No.27, if the Joint Collector pleases to conduct hearing of the applicants, place, date, time and number of applications to be taken up for each hearing may kindly be instructed so as to issue all notices to the applicants for attending of hearing and arbitration.
19.By such office note, the Joint Collector gave a date for hearing of the matter on 29.05.2010 at 10.30 a.m at Serial No.1. The services of other staff members who have put up files and subscribed their signatures under Serial Nos.2 to 4 comes under assisting the Arbitrator under Section 6 of Arbitration and Conciliation Act. The insidious Act of Joint Collector under Serial No.1 did not come under assisting the Collector/ R.3/ Arbitrator under Section 6 of Arbitration and Conciliation Act 1996.
PAGE NO.28
10 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
20.In the office note file at page No.30 subject matter of the case referred is mentioned as orders of Joint Collector, Visakhapatnam. The first four lines and first line of last para at page No.31 goes to show that the Joint Collector fixed date for hearing on 21.08.2010.
PAGE NO.33
21.Office note file at page No.32 refers Joint Collector, Visakhapatnam. The further office note, dated 28.08.2011 at page No.33 in the first reference and also in the last para it is mentioned as note orders of the Joint Collector, Visakhapatnam and also if the Joint-Collector, Visakhapatnam pleases, suitable orders may kindly be issued to take necessary further action on the arbitration cases. The services of other staff members who have put up files and subscribed their signatures under Serial Nos.2 to 4 comes under assisting the Arbitrator under Section 6 of Arbitration and Conciliation Act, 1996. The insidious Act of Joint Collector under Serial No.1 did not come under assisting District Collector/ R.3/ Arbitrator under Section 6 of Arbitration and Conciliation Act, 1996.
11 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
PAGE NO.34
22.In the above further office note file at page No.34, dated 02.09.2011 was written by J.C, it was mentioned as “Discussed these (20)
twenty cases have been delegated by District Collector for Arbitration.
This office note was signed by Joint Collector on 02.09.2011, wherein a
date was fixed on 27.09.2011 at 3.30 p.m to conduct final hearing and
issued summons to the parties. This office note proves that these 20
cases have been delegated by District Collector”. This endorsement is written by the Joint Collector. The insidious Act of Joint Collector under Serial No.1 did not come under assisting District Collector/ R.3/ Arbitrator under Section 6 of Arbitration and Conciliation Act, 1996.
PAGE NO.36
12 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
23."This is statutory duty, prescribed under 3(G)(5) of National Highways Authority Act". The collector is the Arbitrator, Ministry of Road Transport and Highways from their Order, dated 24.08.2001 designated District Collector as Arbitrator though former Collector entrusted the hearing to Joint Collector, Visakhapatnam, vide endorsement page No.35 N.F, dated 20.02.2009. Circulate file to District Collector for fresh hearing.
13 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
24.As per the above endorsement was written by Joint Collector, R.3 again delegated his powers to J.C to conduct hearing at page No.42 of office file, it was mentioned as "as per Orders, the Joint Collector has conducted the hearing on 27.09.2011". In the office note file, dated 01.05.2011 in which one of the aggrieved party Sri V.V.Narasimham, who filed one application for information under R.T.I.Act in para No.3 at page No.47, the note file was prepared as
When a contempt case was moved by the aggrieved party, in case No.1278/2012, the office note was prepared on 05.10.2012 at page No.64 wherein at the bottom there was an endorsement that J.C may
please to conduct hearing of the case on 09.10.2012 at 10.00
a.m. The same was also mentioned in the note file at page No.65 after matter was heard on 09.10.2012 at 10.00 a.m in Collector's Office, Visakhapatnam by the Joint Collector.
25.In the above further office note at page No.36, dated 27.09.2011, it reads as "This is a statutory duty, prescribed under Section 3(5)(G) of National Highways Act, the Collector is the Arbitrator, Ministry of Road Transport and Highways from the Order, dated 24.08.2001 designated District Collector as Arbitrator (former
Collector) entrusted the hearing of J.C vide endorsement page
No.35 note file (dated 20.02.2009), circulate file to District Collector for fresh hearing, passing orders and for instructions". The same was established from the above two endorsements.
26.As per the above note, it seems the then (earlier) District Collector who has entrusted the matter of hearing to J.C might be transferred by the date of 27.09.2011, and New Collector when assumed duties and came. It is as such the note file at page No.36 wherein Joint Collector endorsed that the matter was entrusted to him as per endorsement at page No.25, note file, dated 20.02.2005, he put up the file before the (New) District Collector for fresh hearing and passing orders. It indicates that Joint Collector till then conducted proceedings, issued summons and hearing the parties.
14 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
PAGE NO.39
27.As per the Orders of the Hon'ble High Court of A.P, dated 07.10.2011 at page No.39, the office put up is as per Orders of High Court of A.P, the Joint Collector has conducted hearing on 27.09.2011. The Joint Collector has directed to submit the file to the District Collector for perusal under Serial No.2. The services of other staff members who have put up files and subscribed their signatures under Serial Nos.2 to 5 comes under assisting the R.3 Arbitrator/ Collector under Section 6 of Arbitration and Conciliation Act 1996.
28.When a file was submitted to R.3/ New District Collector/ Arbitrator endorsed "As per earlier endorsement, J.C may please conduct hearing and put up his considered opinion for approval".
15 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
PAGE NO.42
29.The services of other staff members who have put up files and subscribed their signatures under Serial Nos.2 to 4 comes under assisting the R.3 Arbitrator/ Collector under Section 6 of Arbitration and Conciliation Act 1996 but not the Act of Joint Collector under Serial No.1. The insidious Act of Joint Collector under Serial No.1 did not come under assisting the R.3/ Arbitrator under Section 6 of Arbitration and Conciliation Act.
30.Learned G.P as well as Sri K.M.R, Counsel for the first respondent submitted that as can be seen from the contents of the award, i.e., at last line of 1st page and 2nd para of 5th page of Award, it reveals that it is a consent award passed by the R.3/ District Collector, Arbitrator as such having given consent, the aggrieved parties, applicant cannot assail the finding of the Arbitrator by filing Section 34 application and they prays to dismiss the present Appeal is groundless and baseless for which Sri M.R.D, Counsel for applicant submitted that applicant never gave any consent and prays to consider the same and record also reflects the same.
31.When perused the record maintained by the R.3/ District Collector/ Arbitrator at page No.71 on 19.01.2013, written by Joint Collector as follows:
Discussed with the District Collector “Since the applicants have gone back from the consent given orally during Arbitration, therefore the same may be informed to 16 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
National Highways Authorities (R.1) to stop further action on the award passed after arbitration".
32.By considering above facts of note files as stated above, it reveals that the earlier Collector who is R.3 and also subsequent Collector who is R.3 delegated and entrusted the matter to Joint Collector to issue notices and hearing the parties and also collected information and documents of the neighbouring lands. The duties of the Collector is a solemn duty vested under Law cannot be delegated to his Sub-ordinate Joint Collector. One of the office note file reveals that Joint Collector was entrusted to deal with the matter and asked the Joint Collector to put up his considered opinion for approval as mentioned therein at page No.39 and Page No.48. Under Law R.3/ District Collector/ Arbitrator never bestowed any personnel attention to conduct personal hearing of the case with the parties as per orders and the endorsements on note files as stated supra, could establish the Collector delegated his powers to the Joint Collector and even one of the note file at page No.34 wherein the Joint Collector with his own hand-writing written that "these twenty cases have been delegated by District Collector for arbitration" and he further issued notices to the parties.
33.The duties cast upon the District Collector is PERSONA DESIGNATA to conduct proceedings personally, but the District Collector delegated his powers to Joint Collector other person u/Sec.3(G)(5) of National Highways Authorities Act and that basing on the enquiry conducted by Joint Collector who put up his considered opinion for approval is not tenable under law basing on which the Collector / Arbitrator/ R.3 herein passed impugned common consent award in this case, as well as in other seven cases is not tenable and sustainable under law. Joint Collector under the Law is not vested within his power to FERRETING out of facts and its dependability in assessing evidence and also collection of documents and to come to conclusion. R.3/ Arbitrator has only got fettered powers to conduct the Arbitral proceedings but R.3 acted as un-fettered right to delegate his powers to Joint Collector which he is unsupposed to do it. Both the respondents 1 and 2 through their counsels have failed to show any material stating that District Collector/ Arbitrator/ R.3 herein has conducted Arbitral proceedings in accordance with law and passed impugned award is tenable under law. It is therefore, all the above points are settled in favour of applicant and against the respondents herein in the negative.
POINT NO.6:
Whether this court being a Commercial Court
has got jurisdiction to entertain the present
appeal in view of the specific provisions of
Section2(e) & Section 34 of Arbitration and
Conciliation Act 1996 or not ?
34.Now coming to the other aspect raised by the counsel for respondents are concerned that this court has no jurisdiction to entertain this appeal as well as other seven appeals are concerned. When both 17 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
counsels argued on the aspect of this court, having no jurisdiction, at the instance of applicant when moved one application U/O.7 R.10 of C.P.C to return the present Appeal for presentation before the proper court and upon hearing both parties, this court returned all 8 Appeals vide separate orders,
dated 11.03.2020 by directing the petitioner to present the Appeals before
the competent court and when this Appeal and seven other appeals were returned by this court for presentation before the Principal District Court, Visakhapatnam. At that juncture, the first respondent herein filed Transfer O.Ps before the Hon'ble High Court of A.P to Transfer Arbitration O.P.No.621/2014from the file of IV Additional District Court, Visakhapatnam to Principal District Court, Visakhapatnam in which after hearing both parties, the Hon'ble High Court of A.P in its Order, dated 13.08.2019 transferred all the eight Appeals which were returned by this court for presentation before the Principal District Court, Visakhapatnam, are again transferred to this court for disposal according to Law. The Order of the Hon'ble High Court of Andhra Pradesh, dated 13.08.2019 is extracted herein
1. Heard learned counsel for the parties. The request of
the petitioner (R.1) is to transfer Arbitration Original
Petition No.621 of 2014 (New O.P.No.31/2019) now
pending on the file of the Court of learned IV
Additional District Judge, Visakhapatnam, initially to
the Court of learned Principal District Judge,
Visakhapatnam. In view of constitution of Commercial
Court at Visakhapatnam, now it is requested to
transfer the above Arbitration O.P. to this newly
constituted Court. To that effect, a memo was also
filed on behalf of the petitioner in the Registry, on
20.08.2019.
2. On behalf of the respondent, learned counsel reported no objection.
3. In view of the above, this transfer C.M.P.No.162/2019
is allowed and the Arbitration O.P.No.621 of 2014
(New AOP.No.31/2019) now pending on the file of the
Court of learned IV Additional District Judge,
Visakhapatnam, is withdrawn and is transferred to the
Court of learned Special Judge for Redressel of
Commercial Disputes, Visakhapatnam. No order as to
costs.
35.Though this court by its Order, dated 11.03.2020 have returned all the 8 Appeals for presentation before the proper Court i.e., Principal District Court, Visakhapatnam. By virtue of above Order of Hon'ble High Court of Andhra Pradesh in the transfer M.Ps filed by the first respondent/ National Highways Authorities, again all these cases were received by this court and numbered, as per the above directions of the Hon'ble High Court of A.P. The respondents who are now assailing on those lines that this court has no jurisdiction to try the case, have no legs to stand in the eye of law and cannot be permitted to roll back, veered round and somersault to contend that this court has no jurisdiction to try and dispose of these cases. More-over they gave consent for transfer of those cases even to this Commercial Court. The endeavour of R.1 to R.3 in denying Jurisdiction of this court is like doctrine of Approbate and Reprobate which is impermissible under law.
18 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
36.R.1 and R.2's Counsel ought to have placed correct procedure and legal position, did not do so, allowed the issue inter-se the parties not to Quiet-us and still Res-integra. Respondent No.3/ arbitrator shall not delegate his power to J.C to conduct enquiry of Arbitration Proceedings and no power is vested with him under law to pass impugned award. Whatever insidious acts of respondent No.3 in ignoring and rejecting the claim of Appellant herein, infringes their right.
37.In view of the Orders of Hon'ble High Court, now hands of this court have tied down cannot in any way to consider the plea of lack of jurisdiction as contended by the respondents herein. Moreover, this matter is relating to the acquisition of sites of Appellant is of the year 2001. By now 21 years have been elapsed. In view of the observations of the Hon'ble High Court of A.P, in the transfer of above M.Ps., this court do not have any hesitation to hold that this court being Commercial Court headed by
Additional District Judge, coupled with provisions of Section 10(3) of
Commercial Courts Act, has Quarter-Minous and got jurisdiction to entertain the present Appeal. Accordingly, this point is answered.
38.When Joint Collector, Visakhapatnam, as part of hearing passed an order to stop further action on the Award passed after Arbitration, Sri B.V.Ganga Raju and 6 others have filed a W.P.No.12333/2013 before Hon’ble Court of A.P, Hyderabad against R.1 to R.3 herein and also against R.4 Joint Collector therein, who ordered stoppage of payments in R.C.No.2352/05,
dated 21.01.2013, the Hon’ble High Court of A.P passed orders “suspending
the said proceedings of Joint Collector/ R.4 therein in W.P.M.P.No.15231/2013 until further orders. This shows the serious involvement of Joint Collector in the Arbitration proceedings.”
39.A Cumulative effect of reading of all the above paras and also office notes maintained by the District Collector/ R.3/ Arbitrator goes to establish that it is the Joint Collector who conducted enquiry and hearing of the case but not the District Collector. As per one of the office note at Page No.12 goes to show that R.3/ New District Collector/ Arbitrator even permitted the JC on the second occasion to conduct enquiry as entrusted and delegated by earlier collector as stated in para No.26:
40.This court relied upon latest full bench decision of Honourable Supreme Court of India
(State of Chattisgarh and another Vs. M/s.Sal Udyog
Private Limited) Civil Appeal No.4353 of 2010 of
Honourable Supreme Court of India, decided on
08.11.2021
In view of above latest ruling wherein the Honourable full bench of Supreme Court observed that failure on the part of learned sole arbitrator to decide in accordance with the terms of the contract governing the parties, would certainly attract the “patent illegality ground”, as the said oversight amounts to gross contravention of Section 28(3) of the 1996 Act, that enjoins the Arbitral Tribunal to take into account the terms of the contract while making an award. The said ‘patent illegality’ is not only apparent on the face of 19 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
the Award, it goes to the very root of the matter and deserves interference. Accordingly, the present appeal is allowed and impugned Award is vitiated under law.
41.Considering axiomatic, ocular and impregnable evidence that was pointed out by the Appellant counsel, this court u/Sec.34 being Appellate Authority do not have any hesitation to hold and stead-fast to say that R.3/ District Collector/ Arbitrator did not conduct Arbitral Proceedings in proper manner and he delegated his powers to J.C to conduct Arbitral Proceedings are not proper, not tenable and not sustainable under law. As and when there is patent illegality that was cropped up in the proceedings of the Arbitral Tribunal which are in the nature of illegality which could not be cured under law. The illegality and insidious acts that were cropped up in the proceedings of Arbitral Tribunal by R.3/ District Collector are liable to disgorged under law. The learned Arbitrator, who is R-3 herein passed impugned award in Helter and shelter way in transgression, infringement and detrimental to the rights of appellant/ owner herein. The decisions cited by Appellant’s counsel are applicable to the present case. The decisions cited by respondents’ counsel are not applicable to the present facts of the case. The award passed by Arbitrator is VOID Ab-initio and Award is none-est in the eye of law and not enforceable under law. In view of the patent illegality which was narrated and canvassed as above, the findings of the R.3/ Arbitrator in passing impugned consent award are liable to be set aside and vitiated under law. It is therefore all the points are answered and settled in favour of the Appellant herein.
POINT NO.7:
42.In the result,
1) This Arbitration O.P is allowed by setting aside the contents of the Arbitration Award against this appellant only; and
2) Matter is remanded back to the Learned Arbitrator who is 3rd Respondent herein for denova hearing and disposal.
3) Parties are at liberty to canvass their respective contentions on facts without there being influence of any observations made by this court.
4) But be sans costs.
Dictated to the Stenographer, transcribed by her, corrected and pronounced by
me in the open court this the 22nd day of October, 2022
Sd/- xx, M.Tirumala Rao,
III Addl. District Judge-cum-Special Judge for SPE & ACB Cases, Visakhapatnam FAC. Special Judge for trial and Disposal of Commercial Disputes, Visakhapatnam
APPENDIX OF EVIDENCE
20 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
- NIL -
Sd/- xx, M.Tirumala Rao,
III Addl. District Judge-cum-Special Judge for SPE & ACB Cases, Visakhapatnam FAC. Special Judge for trial and Disposal of Commercial Disputes, Visakhapatnam // TRUE COPY //
III Addl. District Judge-cum-Special Judge for & ACB Cases, Visakhapatnam FAC. Special Judge for trial and Disposal of Commercial Disputes, Visakhapatnam 21 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
Date of presentation: 28-02-2013 Date of filing : 11-06-2014
IN THE COURT OF THE SPECIAL JUDGE FOR TRIAL AND DISPOSAL OF
COMMERCIAL DISPUTES, VISAKHAPATNAM
Present: Sri M.TIRUMALA RAO
III Addl. District Judge-cum-
Special Judge for SPE & ACB Cases
(FAC) SPECIAL JUDGE FOR TRIAL & DISPOSAL OF COMMERCIAL DISPUTES,
VISAKHAPATNAM
Saturday, this the 22nd day of October, 2022
C.A.O.P.NO.31/2019 (OLD AOP.NO.621/2014)
Between:
Vallampati Krishna Prasad, S/o.Varaha Narasimham, aged 50 years, Business, r/at.Flat No.C-104, VUDA Apartment, HB Colony, Visakhapatnam-530022 …. Appellant
And:
1. The National Highway Authority of India, Visakhapatnam represented by Project Director
2. The Special Deputy Collector, (L.A.), NH5, Visakhapatnam ….Respondents
3. District Collector and Sole Arbitrator, Maharanipeta, Visakhapatnam-530002 ….Respondent/ Arbitrator
This is Arbitration Appeal filed by the appellant under Section 34 of Arbitration and Conciliation Act, 1996, praying the court to set aside the Common Award No.1/2012, dated 10.10.2012 passed by third respondent/ District Collector who was appointed as arbitrator under Section 3(G)(5) of National Highways Authorities Act 1956; for costs and other ancillary reliefs.
This being a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 Jurisdiction value of Rs.4,84,000/- and a fixed court fee of Rs.500/- is paid under Art.11(n)(b) of APCF and SV Act, court fee paid by way of challan No.35, dated 28.02.2013 in favour of State Bank of Hyderabad, District Court Complex, Visakhapatnam.
22 (CAOP.31/2019 is filed u/Sec.34 of Act to set aside the
Award No.1/2012, dated 10.10.2012 passed by third respondent
on the claim made by the petitioner against respondents 1 and 2
in so far as the same is against the petitioner )
This Appeal came before me on 17.10.2022 for final hearing in the presence of Sri M.Ramdas, Advocate for appellant; and of Sri K.Madhusudana Rao, Advocate for R.1 and Government Pleader, for the Respondents 2 and 3 and having considered the matter till this day, this Court doth order and:
D E C R E E
1. that theArbitration O.P be and the same is hereby allowed by setting aside the contents of the Arbitration Award against this Appellant only and matter is hereby remanded back to the Learned Arbitrator who is 3rd Respondent herein for denova, hearing and disposal;
2. that the parties are at liberty to canvass their respective contentions on facts without there being influence of any observations made by this court; and
3. that there be sans costs.
Given under my hand and the seal of this Court, this the 22nd day of October, 2022
Sd/- xx, M.Tirumala Rao,
III Addl. District Judge-cum-Special Judge for SPE & ACB Cases, Visakhapatnam FAC. Special Judge for trial and Disposal of Commercial Disputes, Visakhapatnam -No costs memo is filed on either side-
Sd/- xx, M.Tirumala Rao,
III Addl. District Judge-cum-Special Judge for SPE & ACB Cases, Visakhapatnam FAC. Special Judge for trial and Disposal of Commercial Disputes, Visakhapatnam.
// TRUE COPY //
III Addl. District Judge-cum-Special Judge for SPE & ACB Cases, Visakhapatnam FAC. Special Judge for trial and Disposal of Commercial Disputes, Visakhapatnam