National Decorating Co. vs Union of India and Others

A.M. Bhattacharjee, J.—The common run of the cases file a in this jurisdiction against the Telegraph Authority, which are almost inundating dockets of this Court, are typical. The petitioners come with the usual complaint that the billing by the Telegraph Authority in respect of the telephones has been wrong and excessive and try to fortify their contention by pointing out that the bills for the periods immediately preceding were at much lower scale. Bills for lesser amounts for the preceding cycles can not, by themselves, lead to the inference that the Bills for higher amounts for the succeeding cycles are wrong or excessive. The respondent Telegraph Authority appears and asserts that the Bills have been correctly made and we then, almost as a matter of course, dispose of the matter by directing the disputes to be referred to arbitration under the provisions of Section 7B of the Telegraph Act, 1885, with a further direction to the Central Government, usually a party to the petitions before us, to appoint an Arbitrator in terms of that Section. Assertion by the subscriber that the telephone bill is excessive and the amount billed is much more than what it ought to have been and a counter-assertion by the Telephone be Authority that the Bill is correct, would, by and large, involve disputed questions of fact and Writ Court is generally not the for am for the adjudication of such disputes and, therefore, until the insertion of Section 7B in the telegraph Act of 1885 in 1957, the dispute was to be resolved by ordinary suit. But is there anything in Section 7B which would justify invocation of the Writ Jurisdiction and the issuance of Writs? Net us have a look at the Section reading as hereunder : -

7B - Arbitration of disputes -

(1) Except as otherwise expressly provided in this Act, if any dispute concerning any telegraph line, cable chamber, tower, appliance or apparatus, arises between the telegraph authority and the person for whose benefit the line, cable chamber, tower, appliance or apparatus is or has been provided, the dispute shall be determined by arbitration, and shall, for the purpose of such determination, be referred to an arbitrator appointed by the Central Government either specially for the determination of that dispute or generally for the determination of dispute under this Section.

(2) The award of the arbitrator appointed under sub-section (1) shall be conclusive between the parties to the dispute and shall not be questioned in any Court.

Learned Counsel for the Petitioner, has urged that the provisions of Section 7B can not apply to any dispute as to excess billing and for this the Learned Counsel has mainly relied on the observations in a recent Special Bench decision of the Gauhati High Court in Santokh Singh Vs. Divisional Engineer, Telephones, Shillong and Others, It is true that the Special Bench in that case has clearly ruled "that the dispute regarding excess building does not fall within the ambit of section 7B" and that "section 7B has no application to a case of excess bulling" but with respect, I have not been able to fursuade myself to agree with these observations and I have no doubt that dispute relating to correctness of the amount billed for the telephone, for the rental or for the calls alleged to have been made, is a dispute concerning the telephone line, appliance or apparatus. The expression concerning means "about". If there could have been no occasion for any telephone Bill but for the telephone line, the dispute relating to the Bill would obviously be a dispute about or relating to or concerning the telephone line. There are good number or authorities for the view I take and reference, among others, may be made to two single-Judge decisions of the Orissa High Court in Nityananda Sahu Vs. Postmaster General and Others, and in Smt. Makhani Devi Banka Vs. Union of India (UOI), both rendered by the same learned Judge and also to a recent Division Bench decision of that High Court in Orissa Vegetable Oil Complex Ltd. Vs. Union of India (UOI), where the earlier Orissa decisions have been relied. In Makhani Devi, (supra), R.N. Misra, J., (as his Lordship then was), has held, relying on his own earlier decision in Nityananda Sahu (supra), that the telephone set provided to the subscriber is an apparatus within the meaning of Section 7B(1) and since the disputed Bills relate to the user of that apparatus, the dispute would obviously be covered by Section 7B(1).

If dispute relating to the amount of Bill concerning or relating to a telephone is, and in my view it is a dispute within the meaning of Section 7B, and such a dispute is raised by the subscribes, it is difficult to understand as to how any action to the prejudice of the subscriber can be taken by the Telegraph Authority for non-payment of such Bill, without having that dispute resolved by arbitration under and in accordance with Section 7B. I should ''like to have no doubt that once a dispute is raised within the meaning of Section. 7B, an arbitration there under is a must before the authority can proceed further to the prejudice of the subscriber. There is nothing to prevent the subscriber from asking :he Authority to take steps for appointment of and reference to the Arbitrator and in fact the subscriber should do so, if he finds the Authority not to move in the matter with reasonable expedition. But since the Authority would not be able to take further action for the non-payment of the Bill until the dispute is arbitrated, and thus the ball is more in its court than that of the subscriber, it would be for the Authority, both in departmental and also in public interest, to take the move as expeditiously as possible. But if the Telegraph Authority does not do so, is the Writ Court the only forum that can be resorted to by the subscriber for the necessary relief ? Can not, and should, not, the subscriber move the Civil Court u/s 20 of the Arbitration Act, 1940 ?

u/s 47 of the arbitration act, the provisions thereof would apply to all arbitrations, private or statutory, subject to the provisions of Section 46. And u/s 46, except the provisions of Sections 6(1), 7, 12, 36 and 37, all the other provisions of the Arbitration Act shall apply to arbitrations under any enactment also "as if the arbitration were pursuant to an arbitration agreement" and as if the relevant statutory provision relating to arbitration under that enactment "were an arbitration agreement", save in so far the Arbitration Act, 1940 "is inconsistent" with the concerned enactment or the rule made the under. The position, as a result of the combined operation of Section 46 and 47 of the Arbitration Act, therefore, is that Section 20 of the Arbitration Act shall apply to an arbitration u/s 7B of the Telegraph Act, 1885, unless there is any thing in Section 20 of the Arbitration Act which "is inconsistent" with Section 7B or any other provision of the Telegraph Act. I have found none.

Mr. Mukharjee for the petitioner has, however, urged that the provisions of sub-section (2) of Section 7B, providing that "that award of the arbitrator....... shall be conclusive between the parties to the disputes and shall not be questioned in any Court", would go to indicate that the provisions of the Arbitration Act providing for modification, remission, setting aside and the like of the award by the Court are inconsistent with the provisions of Section 7B(2) investing the award with finality and also non-justifiability. An award is also made "final and bindina" on the parties under para 7 of the First Schedule of the Arbitration Act and such finality and binding nature should obviously mean that parties can no longer question the same. But these provisions do not make the award, even though "final and binding", immune from the interference by the Court under Sections 15, 16 or 30. I need not, however, pursue this aspect as I am not concerned with the question as to whether Section 7B would outweigh the provisions of the Arbitration Act providing for interference by the Court with the award. But even assuming, though not deciding, that to be so, there is nothing in Section 20 of the Arbitration Act, providing for filing of the arbitration agreement in Court for order of reference to the arbitrator, which is in any way Inconsistent with Section 7B of the Telegraph Act, of its sub-section (2) in particular, which purports to vest the award with finality and non-justifiability. I, therefore, do not find any reason to hold that Section 20 of the Arbitration is not applicable or available to an arbitration u/s 7B of the Telegraph Act.

Mr. Mukherjee has, however, urged that u/s 7B, it is not any of the parties to the dispute like the subscriber or the Telegraph Authority, but only a third party, namely, the Central Government, who is to appoint the arbitrator. And since Section 20(4) of the Arbitration Act clearly provides for an order of reference "to the arbitrator appointed by the parties" or where the parties cannot agree, "to an arbitrator appointed by the Court, it is sufficiently inconsistent with Section 7B of the Telegraph Act to be overthrown by the latter. I have considered the contention with all the care I can afford to but have rejected the same for reasons as hereunder. Let me reproduce the relevant portions of the two Sections before I state the reasons.

Telegraph Act, 1885.

7B.

(1)......... any dispute........ between the telegraph authority and the person for whose benefit the line.......... is or has been provided,........... shall, be determined by arbitration and shall............. be referred to an arbitrator appointed _by the Central Government..........."

Arbitration Act, 1940.

"20.

(4)........... the Court........ shall make an order of reference to the arbitrator appointed, by the parties....... or, where the parties cannot agree........... to an arbitrator appointed by the Court.

It is true Section 20(4) has used the expression "arbitrator appointed by the parties, whether in the agreement or other sic But If the parties have Specifically agreed that the SIC rests with the parties shall be exercised by a third party, then the sic by such agreed third party, would in law amount to appointment by the parties. Quic Quid Par Alium Facit Per Se. If the parties have agreed to delegate and have in fact delegated their power to a third party, the exercise of the power by the delegate would be an exercise of power by the parties themselves.

The three-judge Bench decision of the Supreme Court in Dhanrajamal Gobindram Vs. Shamji Kalidas and Co., appears to be a clear and categorical authority for this proposition, where it has been ruled as hereunder :-

This is a statutory arbitration governed by its own rules, and that the powers and the duties of the Court in sub-section (4) of Section 20 are of two distinct kinds. The first is the judicial function to consider whether the arbitration agreement should be filed in Court or not. That may involve dealing with objections to the existence and validity of the agreement itself. Once that is done and the Court has decided that the agreement must be filed, the first part of its powers and duties is over............ Then follows a ministerial act of reference to the arbitrator or arbitrators appointed by the Parties............ In the present case the parties by their agreement have placed the power of selecting an arbitrator or arbitrators (in which we also include the umpire) in the hands of the Chairman of the Board Directors of the East Indian Cotton Association Ltd. and the Court can certainly perform the ministerial act of sending the agreement to him to be dealt with by him.........In our opinion, there is no impediment to action being taken u/s 20 (4) of the Arbitration Act.

Mr. Mukherjee has, however, drawn my attention to a much later two Judge Bench decision of the Supreme Court in Union of India v. Prafulla Kumar, (1983) 1 LLJ 304 and has sought to rely thereon as an authority for a contrary view. The two-Judge Bench in Prafulla Kumar (supra) could not obviously out-weigh the view of the three-Judge Bench in Dhanrajmal Govindram (supra). But a careful reading of the decision in Prafulla Kumar (supra) would demonstrate that the two-Judge Bench, which has noted the earlier three-Judge Bench decision in Dhanrajmal Govindram. The two-Judge Bench in Prafulla Kumar (supra), has accepted, as it must, the view in, Dhanrajmal Govindram (supra) to the effect that the Court can, even in cases where parties have agreed to the appointment of arbitrators by third parties, proceed u/s 20 and send the agreement to such third party for appointment of arbitrator and all that. But what has been sought to be emphasised in Prafulla Kumar (supra) is that since section 20(4) uses the expression "appointed", the Court is not bound to, but not that it cannot, make an order of reference to an arbitrator, who is to be, but has not yet been, appointed by the appointer. The view of the three-Judge Bench in Dhanrajmal Govindram (supra), that the Court can proceed to invoke its powers and jurisdiction u/s 20, even when the arbitrator is to be appointed by a third party and even where such appointment has not been, but is yet to be, made, must, therefore, be taken to be settled law.

A Division Bench of the Madras High Court in Ama Corporation Vs. Food Corporation of India, has, on a consideration of the two decisions of the Supreme Court in Dhanrajmal Govindram (supra) and in Prafulla Kumar Sanyal (supra), also ruled that even where the parties by their agreement have placed the power of appointing an arbitrator in the hands of another person, the provisions of Section 20 can be effectively invoked and applied. To the same effect is a single-Judge decision of the Delhi High Court in Alkarma vs. Delhi Development Authority ( AIR 1981 Del 230) where, relying on the Supreme Court decision in Dhanrajmal Govindram (supra) and other decisions of the Delhi and some other High Courts, including a Division Bench decision of the Madhya Pradesh High Court in Pargania and Agnihotri vs. Union of India (1977 MP LJ 252), it has been held that the words "the arbitrator appointed by the parties" in Section 20(4) would include an arbitrator appointed or to be appointed by some other party as agreed to parties in the agreement.

Reliance placed by Mr. Mukherjee on an earlier Single-Judge decision of the Delhi High Court in Rai Bahadur Basakha Singh and Sons (Contractors) Pvt. Ltd. Vs. Indian Drugs and Pharmaceutical Ltd., appears to be entirely misplaced. There the agreement provided affirmatively that the arbitrator was to be appointed by a persona designata and it also provided negatively that "If for any reason that is not possible, the matter is not to be referred to arbitration at all". And the persona designate having failed or neglected to appoint an arbitrator, it was held that the Court can not proceed to appoint, an arbitrator on its own u/s 20(4). This is not the case before me. But that apart, it should be noted that two later single Judge decisions of the Delhi High Court, in Alkarma vs. Delhi Development Authority (supra) and in Rajendra Electric Works vs. Delhi state Industrial Development Corporation ( AIR 1981 Del 225), have explained the decision in Basakha Singh (supra) and the other decisions purported to have been relied on therein and it has been ruled that though the Court in such a case may not appoint an arbitrator on its own, the Court can nevertheless, in exercise of its power u/s 20, command the persona designata to make the appointment. As I have already indicated, this is not the question which arises for my consideration in this case; but I would, nevertheless, and that if it were necessary for me to decide the question, I would have respectfully agreed with the two later decisions in Alkarma (supra) and in Rajindra Electric Works (supra).

The position in law, even before a specific bar was introduced in Article 226 by the Constitution (Forty-Second Amendment) Act, 1976 on the power of the High Courts to exercise this jurisdiction where an alternative remedy was available (except for the enforcement of the Fundamental Rights) and also after this express bar was removed by the Constitution (Forty-Fourth Amendment) Act, 1987, is the same and the principles enunciated by a unanimous Constitution Bench of the Supreme Court in Thansingh Nathmal and Others Vs. A. Mazid, Superintendent of Taxes, not having been dissented or departed from by or in any co-equal or larger Bench, must be taken to be the settled law. And that law is that, not with standing the wide arch of its enormous jurisdiction and the immense range of its amplitude and plentitude and magnitude, "it is not exercised merely because it is lawful to do so", "is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute" and "ordinarily the Court will not entertain a petition for a writ under; Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally effacacious remedy". In fact, even as early as in 1957 in Union of India (UOI) Vs. T.R. Varma, an earlier Constitution Bench also ruled that the existence of remedy by way of suit is also to be taken into consideration in granting or refusing relief under Article 226.

I would venture to think that these clear and categorical pronouncements of our apex Court should lead us to hold that refusal of writ, where an alternative effacacious remedy stares at the face, must be the rule and granting thereof must be an exception to be restored to in exceptional Cases. Alternative, effacacious and not unduly onerous alter native remedy must be reckoned as a bar to the invocation of writ jurisdiction, though it cannot be held to be an absolute and unqualified one, for to hold so would be to amed Article 226, is was sought to be done by the Constitution (Forty-Second Amendment) Act., 1976.

Now that I have held that the provisions of Article 20 of the Arbitration Act are available for an effective arbitral reference for a dispute u/s 7B(1) of the Telegraph Act, I do not see any reason as to why this Court shall not decline to entertain a Writ Petition for reference to arbitration under the provisions of Section 7B and the petitioner shall not be required to resort to Section 20 of the Arbitration Act. I do not see what necessary relief may not be available u/s 20 Arbitration Act which would be available under the Writ Jurisdiction.

Learned Counsel for the parties have, however, endeavored to urge that if resort is made to be provisions of Section 20, Arbitration Act., 1940, an interim relief pending that proceeding and pending the arbitration that may follow, may not be available. I am afraid that this contention must be rejected in view of the provisions of Section 41(a) of the Arbitration Act making the provisions of the CPC applicable to all proceedings before the Court under the Arbitration Act and, in particular, the provisions of Section 41(b), where under the powers of the Court in respect of any of the matters set out in the Second Schedule to the Act have been clearly spelt out and the Entry No. 4 in that Schedule is "interim injunction or the appointment of receivers."

These provisions clearly confer on the Court all the powers that Civil Court may exercise in respect of the matters specified in the Second Schedule including "interim injunctions". They are not, in terms, limited to pending arbitration proceeding and may be exercised although the arbitration proceeding has not yet commenced and the Court can exercise such powers as soon as an application is moved and registered u/s 20, even though the notice of the application might not have been served on or reached the other party. Reference in this connection may be made to a decision of this Court in Chhedilal Hariniwas Vs. Brit-over Limited and to a decision of the Patna High Court in Nagarchand Goenka Vs. Surendra Nath Sarkar,

In all these three Writ Petitions, the cases made by the respective Petitioners are that the Bills presented them are excessive and arbitrary and while in the two Petitions being C.O. 4955(W) of 1990 and C.O. 7902 (W) of 1990, the petitioners have prayed for orders directing reference to arbitration under the provisions of Section 7B, Telegraph Act, in the other Petition being C.O. 7901 (W) of 1990, the Petitioners has prayed for Writs/Orders directing the Respondents to withdraw and/or cancel the Bills. I do not think that this Court is the proper forum for the determination of the dispute as to the correctness of the Bills presented and therefore the writs/orders prayed for directing withdrawal or cancellation of the disputed Bills can not issue. The Learned Counsel for the Respondents has drawn my attention to a Division Bench decision of this Court in AFOD No. 1040 of 1987 (Plasto Toys Industries vs. General Manager, Calcutta Telephones, decided on 11th March, 1987), where G.N. Ray, J., speaking for the Bench, has also ruled to the same effect. The only relief that can be granted in these cases is a writ/order directing the Respondents to take steps for reference of the disputes to arbitration u/s 7B and such relief is to be granted in C.O. 7901 (W) of 1990 also, even though not specifically prayed for. Absence of any specific prayer for a particular relief can never stand in the way of its being granted if the materials on record warrant such grant.

As I have made it clear at the outset, not that a Writ Court cannot issue a proper writ or order directing the Respondents to initiate arbitral reference u/s 7B, Telegraph Act. But all that I have endeavoured to point out is that once a dispute relating to the amount payable by the subscriber or any other dispute within the meaning of Section 7B is raised, determination of such dispute by reference to arbitration under that Section is a must. And if the Telegraph Authority refuses or neglects to take the requisite steps for initiation of such reference, the subscriber has a clear, remedy u/s 20 of the Arbitration Act, and the Court, where the subscriber initiates the proceeding u/s 20, can direct the Central Government to appoint an Arbitrator, unless such a one is already appointed generally for the purpose, and refer the dispute to such arbitrator. The Court may also, if it so thinks fit, issue interim orders u/s 41 of the Arbitration Act, on such terms as to payment or otherwise, restraining the Telegraph Authority from disconnection the service pending arbitration or even directing restoration, if disconnecting has already been effected before or pending the arbitration. With these provisions staring at the face providing for such adequate reliefs that a subscriber can have in respect of a dispute covered by the provisions of Section 7B of the Telegraph Act, I have not been able to appreciate our entertaining'' petitions in this extra-ordinary jurisdiction for such ordinary matters. If we are to, as we can not but, govern ourselves by the principles enunciated by the Supreme Court in Thansingh Nathral (supra), extracted hereinbefore, we ought to reserve this jurisdiction for such matters only, where no adequate remedy can be available in any other forum. But as already stated, since it is not that a writ can never lie and we cannot entertain these petitions, and as these petitions have already been entertained and the parties have put in affidavits and the matters have been finally heard at considerable length, I do not propose to reject these petitions solely on the ground of existence of alternative remedies. Since I have already entertained these petitions, and have heard the parties, which undoubtedly I can, I direct that the Central Government, a party-respondent to these petitions, shall appoint an Arbitrator for the determination of the disputes raised in these petitions within one month from the date of this order and the disputes shall stand referred to such arbitrator, who shall enter on the reference forthwith and shall submit his award within three months from the date of his entering on the reference. And I direct further that pending such arbitration and publication of the award, the respondents shall not take any steps to disconnect the telephone line on the ground of nonpayment of the Bills in dispute, provided half of the amount claimed in those Bills is deposited, cannot already deposited, within a month from this date with the Telegraph Authority. Such deposit by the subscriber and receipt by the Telegraph Authority shall be strictly without any prejudice to the rights and contentions of the parties relating to the dispute. And I would like to make it clear that the order passed by me in these three cases shall not be treated as any precedent. No costs.