The court emphasized that disputes over compensation under the Railways Act are not classified as "commercial disputes" under the Commercial Courts Act, 2015.
In a significant ruling, the Chhattisgarh High Court has held that disputes arising out of land acquisition for railway projects do not fall within the purview of "commercial disputes" as defined under the Commercial Courts Act, 2015. This decision was rendered in the case of Sagarmal Agrawal v. Deputy Chief Engineer South Eastern Central Railway Bilaspur, where the appellant challenged the jurisdiction of the Commercial Court in a compensation dispute related to land acquisition by the Indian Railways.
The appellant, Sagarmal Agrawal, had filed an application under Section 34 of the Arbitration and Conciliation Act, 1996, before the 2nd Additional District Judge (Commercial Court), District Judge Level, Bilaspur. The application was dismissed on the grounds of limitation. However, the High Court, comprising Justices Parth Prateem Sahu and Sachin Singh Rajput, noted that such disputes do not qualify as "commercial disputes" under Section 2(1)(c) of the Commercial Courts Act, 2015, unless explicitly notified by the Central Government.
The court observed that the land in question was acquired under the Railways Act, 1989, for the construction of a special rail project. The appellant contested the compensation amount awarded, seeking enhancement through arbitration, which was subsequently rejected. The High Court clarified that the appropriate forum for such disputes is the Principal District Judge, not the Commercial Court.
In its detailed judgment, the court referenced similar cases, including Anand Khedia v. Commissioner-cum-Arbitrator, Bilaspur, and reiterated that the absence of a notification by the Central Government meant that the Commercial Court could not assume jurisdiction over such matters.
The High Court set aside the Commercial Court's order and granted the appellant the liberty to approach the competent forum for seeking redressal. This ruling underscores the necessity for clear jurisdictional boundaries in arbitration cases related to land acquisition, especially when classified under specific legislative frameworks like the Railways Act.
The judgment is expected to have far-reaching implications for similar disputes across the country, ensuring that they are addressed by the appropriate judicial forums.
Bottom line:-
Jurisdiction of Commercial Court under the Commercial Courts Act, 2015 does not extend to disputes arising out of land acquisition under the Railways Act, 1989, as such disputes are not considered "commercial disputes" under Section 2(1)(c) of the Commercial Courts Act, 2015 unless specifically notified by the Central Government.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Section 34, Commercial Courts Act, 2015 Sections 2(1)(c), 10, 15, Railways Act, 1989 Section 20F
