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13 March 2024

High Court Invalidates Arbitral Award, Upholds Writ Jurisdiction

In a pivotal legal development, the Allahabad High Court recently issued a landmark verdict emphasizing the fundamental principles of constitutional governance and the judiciary's role in upholding them. The case, titled "Dr. Rajeev Sinha vs. Union Of India And 2 Others," centered around a dispute regarding land acquisition under the National Highways Act, 1956, and the subsequent arbitration process conducted by the District Magistrate/Collector of Jhansi.

At the heart of the matter lies Section 3G of the NHAI Act, which provides the framework for determining compensation in cases of land acquisition for national highways. Sub-section (5) of this provision grants the Central Government the authority to appoint an arbitrator to settle disputes arising from disagreements over compensation amounts between parties involved in the acquisition process.

Dr. Rajeev Sinha, the petitioner in this case, challenged an arbitral award issued by the District Magistrate/Collector concerning the compensation for land acquired under the NHAI Act. The crux of Dr. Sinha's contention lay in the failure of the arbitrator to adhere to the directives issued by the District Judge, Jhansi, despite a remand order issued under Section 34 of the Arbitration and Conciliation Act, 1996.

The Allahabad High Court, comprising Justice Manoj Kumar Gupta and Justice Kshitij Shailendra, delivered a resolute judgement underscoring the significance of Article 226 of the Constitution of India. The Court affirmed that the existence of an alternative legal remedy does not preclude the exercise of its writ jurisdiction under Article 226.

In its meticulous analysis, the Court expressed severe disapproval of the Arbitrator's conduct, emphasizing the imperative of adhering to quasi-judicial discipline. The Court's scathing observation stated, "The Arbitrator/Collector was bound to follow the quasi-judicial discipline and record findings on each of the parameters discussed by the learned District Judge."

To bolster its decision, the High Court invoked several legal precedents, including the seminal judgement in State of U.P. v. Mohammad Nooh. This case established that the availability of an appeal mechanism does not automatically foreclose the issuance of a Writ of Certiorari, provided that the requisite grounds for judicial review exist.

Additionally, the Court referred to the ruling in Commissioner of Income Tax and Others v. Chhabil Dass Agarwal, which outlined exceptions to the doctrine of exhaustion of remedies. The judgement enumerated instances where statutory authorities act in defiance of procedural fairness or fundamental principles of justice, warranting intervention under Article 226.

Consequently, the High Court allowed Dr. Rajeev Sinha's writ petition, setting aside the arbitral award issued by the District Magistrate/Collector. The Court directed the Arbitrator to revisit the case and issue a fresh order in strict conformity with the directives issued by the District Judge, Jhansi.

This landmark verdict serves as a beacon of the judiciary's unwavering commitment to upholding the rule of law and ensuring procedural fairness in legal proceedings. By affirming the potency of writ jurisdiction, the Allahabad High Court has reaffirmed its role as a guardian of constitutional values and a bulwark against arbitrary exercise of power. In doing so, it has underscored the enduring importance of judicial oversight in preserving the sanctity of India's legal system.

Case :- WRIT - C No. - 33840 of 2023

Petitioner :- Dr. Rajeev Sinha Respondent :- Union Of India And 2 Others

Counsel for Petitioner :- Kalpana Sinha,Sr. Advocate

Counsel for Respondent :- A.S.G.I.,C.S.C.,Pranjal Mehrotra,Raghav Dwivedi

Connected With Case :- WRIT - C No. - 42177 of 2023

Petitioner :- National Highways Authority Of India

Respondent :- State of U.P. and Another Counsel for Petitioner :- Raghav Dwivedi Counsel for Respondent :- C.S.C. Hon'ble Manoj Kumar Gupta,Acting Chief Justice Hon'ble Kshitij Shailendra,J.