Himachal High Court Warns Arbitrator Over Delays, Extends Deadline in National Highway-21 Compensation Case

Himachal Pradesh High Court, in Nand Lal vs. The Land Acquisition Collector, National Highway & Ors., addressed delays in arbitration proceedings concerning the acquisition of land for National Highway 21 in District Mandi. The court extended the mandate of the arbitrator until March 25, 2025, criticizing the arbitral process for breaches of statutory timelines under the Arbitration and Conciliation Act, 1996.

The dispute arises from the acquisition of land under the National Highways Act, 1956, for the widening and maintenance of National Highway-21. The petitioner, Nand Lal, contested the compensation awarded by the Land Acquisition Collector and initiated arbitral proceedings. The arbitration related to Award No. 1/3 dated April 26, 2018, but the case faced repeated adjournments, and the arbitrator's mandate expired without concluding the proceedings.

The petitioner filed for an extension under Section 29-A of the Arbitration and Conciliation Act, 1996, which sets strict timelines for concluding arbitration but allows for extensions by court order.

The core issue before the court was whether the arbitrator had violated the statutory time limits under Sections 23 and 29-A of the Arbitration and Conciliation Act. Section 29-A mandates that an arbitral award be rendered within twelve months from the completion of pleadings, with a possible six-month extension if agreed upon by the parties.

Justice Bipin Chander Negi highlighted how the arbitrator repeatedly delayed the proceedings, stating:

"The proceedings have been conducted by the learned Arbitrator by observing statutory provisions… more in their breach rather than in their observance."

The court emphasized that statutory timelines must be adhered to, adding that any further breaches could result in the termination of the arbitrator’s mandate under Section 29-A(6). Nonetheless, the court extended the timeline to avoid prejudice to the petitioner, whose compensation claim had been pending for years.

The court granted an extension for the arbitrator to conclude the proceedings by March 25, 2025. While extending the mandate, the court warned that continued delays would not be tolerated:

"If the Court finds the Arbitrator to be remiss in his duties… it shall not hesitate in invoking its powers… to terminate the mandate of the Arbitrator."

Additionally, the court referenced the 2022 Supreme Court decision in Cognizance for Extension of Limitation, which allowed for the exclusion of time periods impacted by the COVID-19 pandemic. The court applied this principle to grant additional time for the arbitration process.

In this ruling, the Himachal Pradesh High Court extended the arbitrator’s mandate while underscoring the importance of adhering to statutory timelines. The court directed the arbitrator to adhere to a strict timetable and finalize the proceedings by March 2025 to ensure the petitioner receives timely compensation.

Date of Decision: September 25, 2024

Nand Lal vs. The Land Acquisition Collector, National Highway & Ors.​.