The Division Bench comprising Justice A. Muhamed Mustaque and Justice P. Krishna Kumar ruled that District Collectors, already burdened with administrative responsibilities, are ill-equipped to conduct fair arbitration proceedings for land acquisition compensation.
“We are certain that the District Collector, who discharges other functions, will not be in a position to attend each of these cases,” observed Justice Mustaque, stressing the impracticality of expecting due judicial process in such a high volume of disputes.
The court was hearing a batch of cases, including W.A. No. 1784 of 2023 and W.P.(C) Nos. 28555 of 2021, 789, 22779 & 25045 of 2022, filed by landowners from Alappuzha district challenging the arbitration process carried out by the NHAI.
Advocates representing the petitioners – P. Sathisan, Dona Augustine, Javed Haider, Gopika Anil, Abhiram Sunish, Biju P. Paul, and Shibu B.S – argued that several awards were being issued without a hearing, violating the landowners' right to fair compensation.
“A substantial number of cases have been disposed of by the District Collector without giving parties an opportunity to adduce evidence,” the court noted, expressing concern about the integrity of the process.
The High Court cited Paragraph 169, Clause 'e' of the Supreme Court judgment in Central Organization for Railway Electrification v. ECI SPIC SMO MCML (JV) [2024 SCC Online SC 3219] to highlight the limited scope for challenging such awards under Section 34 of the Arbitration and Conciliation Act, 1996.
In light of the serious challenge to the District Collector’s dual role, the Court has directed the Chief Secretary of Kerala to notify all District Collectors across the state to refrain from proceeding with any such arbitration cases until further orders.
Further, the Bench advised the Union Government to consider alternate mechanisms, such as referring disputes to the Kerala High Court Arbitration Centre, which already has infrastructure in place for reserved arbitration involving the State or Centre.
“There is a complete waiver of the arbitration fee except for a nominal administrative fee… These arbitrators are drawn from the State Judicial Service in the rank of senior civil judge,” the court stated, emphasizing the Centre’s option to adopt an established, impartial mechanism.
However, the Court clarified that landowners who wish to continue arbitration with the District Collector as arbitrator can do so by expressly opting in.
This development not only affects thousands of pending compensation disputes in Kerala but could also set a precedent for re-evaluating the role of executive officers in quasi-judicial functions under national infrastructure projects.
Read The Judgment Here
keywords: Kerala High Court, NHAI arbitration, District Collector, Land acquisition disputes, Arbitration and Conciliation Act, Kerala Arbitration Centre
