Delay Plea Under Section 29A A&C Act Cannot Be Invoked By NHAI To Stall Arbitration When Extensions Were Granted In Similar Highway Land Acquisition Matters: Himachal Pradesh High Court
Sanchayita Lahkar
The High Court of Himachal Pradesh Single Bench of Justice Ranjan Sharma allowed a landowner’s legal heirs’ request to extend the mandate of the arbitrator in a compensation dispute arising from acquisition of land for widening a national highway. The Court extended the arbitrator’s mandate, rendered inoperative any orders that had closed or kept the proceedings in abeyance for the petitioners, and directed the arbitrator to conclude the arbitration and pass an award within six months. It held that the National Highways Authority of India could not rely on delay and laches to block continuation of the arbitration where extensions had already been granted and arbitration had been completed for other similarly placed landowners. The Court noted that after participating for nearly nine years, NHAI could not invoke delay, consistent with the Arbitration and Conciliation Act, 1996’s aim of effective dispute resolution.
The proceedings arose from a petition filed by the legal representatives of a deceased landowner seeking extension of the mandate of the arbitrator in a land acquisition dispute relating to a national highway project in Himachal Pradesh. Land belonging to several villagers, including the predecessor-in-interest of the petitioners, had been acquired pursuant to a statutory notification issued for widening of a national highway. Compensation was awarded by the competent authority, following which a reference was sought before the Arbitrator-cum-Divisional Commissioner for enhancement of compensation.
Arbitral proceedings commenced and continued for several years. However, by a common order passed in March 2023, the arbitrator closed multiple references on the ground that the statutory time limit prescribed for completion of arbitration had expired. The petitioners approached the High Court seeking extension of the arbitrator’s mandate, which was initially granted. Despite this, the arbitral proceedings in the petitioners’ case did not conclude, allegedly due to administrative lapses, misplacement of the extension order, and an incorrect recording of the deceased claimant’s name in earlier orders. The arbitrator ultimately closed the proceedings again in May 2025, leading the petitioners to seek further extension of the mandate under the Arbitration and Conciliation Act, 1996.
The Court examined the statutory framework governing timelines for arbitral proceedings and the power of courts to extend the mandate of an arbitrator. Referring to the factual record, the Court noted that “the arbitral proceedings commenced in the year 2016 and the same continued without any objection by either of the parties.” It recorded that “the material on record reveals that the arbitral proceedings were delayed due to procedural and administrative delays.”
The Court observed that the adverse impact of the COVID-19 pandemic contributed to the non-conclusion of proceedings and that “even parties to arbitral proceedings did not object to the continuance of arbitral proceedings beyond the permissible period.” It further stated that “nothing has been placed on record to show that the non-conclusion of arbitral proceedings was attributable solely to the petitioner(s).”
With respect to the incorrect recording of the claimant’s name, the Court recorded that “while passing the common orders on 13.03.2023, the description [name] of the predecessor-in-interest of the petitioner was shown as Sandeep Kumar instead of Sandesh Kumar.” It noted that this discrepancy “was attributable to the learned Arbitrator” and could not be invoked against the petitioners, particularly when “the present petitioners had participated in the proceedings till the passing of the impugned order.”
The Court further observed that “respondents cannot be permitted to take the plea of delay and laches” when similarly placed landowners had been granted extensions and their proceedings concluded. It stated that “once the parties to arbitral proceedings had participated for about nine years, the statute was to be given a meaningful life so as to make it workable and practicable.”
The Court concluded that “the action of the learned Arbitrator in keeping the proceedings pending… establishes ‘sufficient cause’” warranting extension of the mandate to enable completion of arbitration.
The Court directed that “the mandate of the learned Arbitrator-cum-Divisional Commissioner, Shimla is extended” and that “the adversial orders, if any, closing the proceedings or keeping the proceedings in abeyance are rendered inoperative, qua the petitioner(s).”
“The Arbitrator-cum-Divisional Commissioner, Shimla is directed to conclude the arbitral proceedings and decide the reference by passing the award in accordance with law, within six months from the date of receipt of a copy of this judgment. The parties shall bear their respective costs,” and that all pending miscellaneous applications stood disposed of.
Advocates Representing the Parties
For the Petitioners: Mr. Ashir Kaith, Advocate
For the Respondents: Mr. Karan Sharma, Advocate for the National Highway Authority of India; Ms. Ayushi Negi, Deputy Advocate General for the State
Case Title: Sandesh Kumar (Deceased) Through LRs v. National Highway Authority of India & Another
Neutral Citation: 2025: HHC:42179
Case Number: Arbitration Case No.: 351 of 2025
Bench: Justice Ranjan Sharma
