Under the National Highways Act 1956 (“NHA”), when land is acquired, the competent authority determines compensation. If that determination is not accepted, the matter goes to an arbitrator and the Arbitration and Conciliation Act, 1996 (“ACA”) applies subject to the provisions of the NHA. One of the sections in NHA- Section 3G(5), prescribes that the arbitrator is to be “appointed by the Central Government.”

What if the Central Government is delaying the appointment? Would an application under Section 11 of the ACA be maintainable?

The court answered, no:

1. The NHA is a special enactment and has an inbuilt mechanism for the appointment of arbitrators by the Central Government. ACA is a general law and the application of Section 11 ACA is impliedly excluded. The expression “subject to” indicates that the legislature wanted to give overriding effect to the NHA.
2. The NHA does not set a limitation period for the exercise of this power, but there is no unguided discretion and an arbitrator must be appointed within a reasonable time. If not done, the remedy is to file a writ petition under Article 226 of the Constitution of India or a suit.
3. The submission—relying on Deep Trading Company v. Indian Oil Corporation and others, (2013) 4 SCC 35 (“Deep”)— that the Central Government forfeited its right to appoint is without substance and Deep does not apply because:-
   1. There is no statutory limitation under the NHA.
   2. The controversy in Deep was not of appointment under a special enactment, but whether a party, by not exercising its right in time, forfeited the contractual right to appoint.