Punjab-Haryana High Court
M/S. Om Prakash Satish Kumar Thapar vs Union Of India Through Its Secretary on 5 February, 1996
Equivalent citations: AIR1996P&H250, (1996)113PLR42, AIR 1996 PUNJAB AND HARYANA 250, (1996) 3 RECCIVR 72, (1996) 1 CURLJ(CCR) 633, (1996) 2 LJR 231, (1996) 113 PUN LR 42
Author: R.P. Sethi
Bench: R.P. Sethi, Swatanter Kumar
ORDER R.P. Sethi, J.
1. What is the scope, limit and extent of the powers under Article 226 of the Constitution of India in relation for the purposes of giving effect to or issuing directions for the enforcement of arbitration agreements arising out of and under the statutory arbitration clause ? and what are the meaning of the word 'dispute' for the purpose of making a reference to the Arbitrator under the Arbitration Act ? are the twin questions of law required to be adjudicated in Civil Writ Petition Nos. 7819, 12115, 15662, 13882, 13796, 12116 and 15706 of 1995.
2. The petitioners who are subscribers of telephone connection detailed in their petitions have disputed their liability to make the -payment of the alleged excess of telephone meters and have prayed for reference of the dispute to the Arbitrator in terms of Section 7 of the Indian Telegraphs Act, 1885. It is contended that despite their being a statutory obligation upon the respondents, the disputes have not been referred to the Arbitrator leaving no option with the subscribers except to approach this Court under Article 226 of the Constitution of India with a prayer of issuance of directions for making reference to the Arbitrator. The petitioners have relied upon various judgments of different High Courts in support of their contention and submitted that disconnection of their telephones cannoi be ordered by the respondents without referring the matter to the Arbitrator. It is further submitted that the petitioners cannot be forced to make the payment of the disputed amount under the threat of disconnecting their telephone connections.
3. The petitions are resisted on the ground that the petitioners have no cuase of action to invoke the extraordinary writ jurisdiction under Article 226 of the Constitution of India and in fact there is no dispute between the parties requiring reference to the Arbitrator.
4. Section 7B of the Indian Telegraph Act Provides:
"7-B. Arbitration of Disputes:--
(1) Except otherwise provided in this Act, if any dispute concerning any telephone line, appliance or apparatus arises between the telegraph and the person for whose benefit the line, appliance or apparatus is or has been provided, the dispute shall be determined by Arbitration and shall for the purpose of such arbitration, be referred to an Arbitrator appointed by the Central Government either specifically for the determination of that dispute or generally for the determination of the dispute under this section.
(2) The Award of the Arbitrator appointed under sub-section (1) shall be conclusive between (he parties to dispute and shall not be questioned in any Court."
5. Rule 421 of the Indian Telegraphs Rules empowers the respondents to disconnect the telephone. Rule 421 provides :--
"Rule 421. Disconnection of Tele- phone :--
Where the Divisional Engineer is satisfied for reasons to be recorded in writing that it is necessary to do so, he may, after giving the subscriber a notice in writing for a period which shall not except in emergent cases, be less that 7 days, disconnect the telephone and . in such case the subscriber shall be entitled to refund of rent for the unexpired portion of the period of which the connection or service was given."
6. Section 46 of the Arbitration Act provides that provision of the Act excepting sub-section (1) of Section 6 and Sections 7, 12 and 37 shall apply to every arbitration under any other enactment for the time being in force as if the arbitration were 'pursuant to arbitration agreement and as if that other enactment were in arbitration agreement, except in so far as the Act was inconsistent with other enactment or with any rules made thereunder.
7. A combined reading of Section 7B of the Indian Telegraphs Act and Section 46 of the Arbitration Act would make it clear that the dispute between the parties with respect to a dispute concerning any telephone line, appliance, apparatus are required to be referred to an Arbitrator appointed by the Central Government either specifically for the determination of that dispute or generally for the determination of the dispute under Section 7B of the Act. It is, however, contended that as for all practical purposes, there exists an arbitration agreement between the parties, the petitioners should not be permitted to invoke the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India and be directed to approach the appropriate Court under Section 20 of the Arbitration Act. Generally speaking the argument is attractive but upon analysis cannot be accepted for non-suiting the petitioners.
8. It is acknowledged position of law that the power of the High Court to issue writs under Article 226 of the Constitution can be exercised for the purpose of either enforcing the fundamental rights or ordinary legal or statutory rights. The directions can also be issued 'for any other purpose'. The words 'for any other purpose' are required to be read in the context of what precedes the same. This expression is wide enough to include issue of writs or orders in cases of violation of any legal right of a person or a citizen. This does not mean that the High Court can issue writs for any other purpose it pleases but the words necessarily imply for the enforcement of any other right available to a citizen.
9. The pelitioners case is that despite there being statutory obligation under Section 8 of the Indian Telegraphs Act, the respondents have declined to make the reference, leaving no option for them except to approach this Court for the grant of a writ in the form of mandamus. A writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that Officer to discharge that statutory obligation. It is high prerogative writ of most extensive remedial nature in the form of a command issued by the High Court, directing to any person, Corporation or inferior Court requiring him or them to do some particular thing which appertains to his or their office and is in the nature of a public duty. Before the mandamus can be issued, the petitioner is obliged to show the existence of a legal right in his favour and a corresponding obligation upon the respondents. It has been held that mandamus is an appropriate remedy to enforce the plain, positive, specific and ministerial duty existing and imposed by law upon officers who refuse or neglect to perform such duty "when there is no other adequate and specific remedy and without which there would be failure of justice.
10. In the instant case, the existence of a right in favour of the petitioners and a corresponding obligation upon the respondents is almost admitted and proved. The petitioners cannot be deprived of their right only on the technical grounds as projected in the reply. In the peculiar facts and circumstances of the case, it can be safely said that the alternative remedy available to the petitioners under Section 20 of the Arbitration Act is not effective and efficacious.
11. Reliance of the learned counsel for the respondents on 'Nagendra Nath v. State of West Bengal', AIR 1987 Cal 199, is misplaced. The Calcutta High Court in that case under the circumstances held that the right of a party to get the dispute referred to arbitration was a contractual right for which the remedy was provided under the Arbitration Act and that the person aggrieved of the violation of a contract cannot invoke the jurisdiction of the Court under Article 226 of the Constitution of India. In that case, the writ petitioners submitted a tender in the name of a Company for a part of the work in the construction of a 300 bedded general hospital, excavation of a tank and for raising the site under the E.S.I. Scheme at Budge Budge in the district of 24 Parganas under the Presidency Circle. The tender of the writ petitioner was accepted and a registered letter was issued to him which was treated as a formal work order. By a subsequent order, the Secretary P.W.D., West Bengal, intimated the petitioner that the Governor had been pleased to sanction, inter alia, enhancement by 15 per cent over the accepted tender including sanitary and plumbing works which had commenced earlier than the 1st April, 1966 but had not yet been completed. The writ petitioner having been awarded the work of construction expected to get advantage of the said enhancement as sanctioned. As the contract has been accepted and the work order was issued after 1-4-1966, he was not allowed the said enhancement as sanctioned. He represented to the authority for the acceptance of tender which has been delayed by the authorities and a considerable time was taken in issuing the approval of the terms and the work could have been started only in April, 1966. The representation was not entertained and refused. Clause 25 of the Terms of the Contract executed between the parties provided an arbitration clause. The writ petitioner asked for arbitration in terms of the arbitration clause in respect of his claim for enhanced rates as sanctioned and also in respect of supplementary bill. The authority concerned referred the dispute relating to the supplementary bill to the arbilration but refused to refer the dispute arising out of the writ petitioner's claim for enhanced rales. The petitioners thereafter filed a writ petition under Article 226 of the the Constitution in which the Rule Nisi was issued calling upon the respondents to show cause as to why a writ in the nature of mandamus should not be issued directing them to cancel or rescind the lelter of the respondent by which the prayer of the petitioner was declined and the Government had refused to refer the dispute to arbitration settlement of enhancement of the tender rates. The writ petition was dismissed by the single Bench holding that Section 20 of the Arbitration Act governed arbitration with the intervention of the Court in respect of cases where no suit was pending. It was further held that the remedy to the petitioner was provided under the Arbilration Act and he could not enforce his right by means of a writ petition. To arrive at such a conclusion, the reliance was placed on a decision of the Supreme Court in Rukmanibai Gupta v. Collector of Jabalpur, AIR 1981 SC 479. In that case, the Apex Court had noticed that the appellant therein who was admittedly governed by an arbitration clause, had in fact availed of the remedy under the Arbitration Act and after the award was passed against her an attempt was made to question its legality by filing a writ petilion. It was contended on behalf of the respondents that if the appellant had any grievance about the award given by the respondents therein, it was open to her to take recourse to proceedings under the Arbitration Act and the writ petition could not be entertained by the Court. The writ petition was dismissed by the High Court and in appeal the Supreme Court on facts found that adequate hearing had been given to the appellant who was properly represented before the Arbitrator. It was found that the Arbitrator had acted in accordance with the principles of natural justice. It was noted by the Supreme Court that :--
"If respondent No. 4 was. an Arbitrator and his decision an award, the next question is whether such an award can be questioned by way of a writ petition in the High Court."
and in this regard the Court held :--
"Arbitration Act, 1940 is a self-contained and exhaustive Code. It provides for filing arbitration agreement to the jurisdiction of Court, appointed and removal of arbitrator by Court, making award a rule of Court, remitting or setting aside an award etc. Where the Arbitrator has made an award it can be questioned under Section 33. Section 32 bars a suit on any ground whatsoever for contesting an award and further provides that no award shall be enforced, set aside, amended, modified or in any way affected otherwise than as provided in the Arbitration Act in itself. Thus, Arbitration Act, 1940 is a self-contained exhaustive Code. Relief sought by the appellant by invoking extraordinary jurisdiction of the High Court under Article 226 could have been obtained by proceeding in accordance with the relevant provisions of the Arbitration Act. In this situation, if the High Court declined to entertain the writ petitions, no indenture of lease constitutes a contract between the parties. Right to excavate lime stone from leased area and obligation to pay royalty under the relevant Minor Mineral Rules arise from the contracl. The contract provided for resolution of dispute arising out of the carrying out of contract. The writ jurisdiction of the High Court under Article 226 of the Constitution is not intended to facilitate avoidance of obligation voluntarily incurred (Sec Har Shankar v. The Dy. Excise and Taxation Commissioner, AIR 1975 SC 1121)."
12. The Calcutta High Court appears to have not appreciated the judgment of the Supreme Court in the context and circumstances under which it was pronounced.
13. Similarly, the Madhya Pradesh High Court in 'Nandlal Bhandari Mills v. Madhya Pradesh Electricity Board, AIR 1969 MP 105, refused to make a reference to the Arbitrator leaving it open to the petitioners to pursue the remedies provided under the Act for enforcing arbitration.
14. In none of the two judgments, it was held that existence of an alternative remedy under the Arbitration Act was an absolute bar to invoke the jurisdiction of this Court under Article 226 of the Constitution of India particularly when the statutory authority refuses to discharge its duty in making reference to the Arbitrator as per the provisions of the statutory arbitration clause, Even though there is no specific bar in approaching this Court for the grant of relief of issuance of a writ of mandamus for compliance of the statutory obligation yet it would be appropriate that the parties invoking the arbitration clause are insisted upon firstly to seek the appropriate remedy under the Arbitration Act itself which has been held to be a self-contained exhaustive Code. Relief by invoking the extraordinary urisdiction of (his Court under Article 226 of the Constitution should not ordinarily and frequently be allowed and resorted to. A itigant should ordinarily be insisted upon to approach the Court of competent jurisdiction under the Arbitration Act and only in exceptional circumstances permitted to approach this Court under Article 226 of the Constitution of India where it is shown that the respondent-authorities have miserably "ailed to discharge the statutory obligations arising out of an enactment. No reference can, however, be directed to be made on the basis of a duly executed agreement between the parties. The exception, if any, can be made in a case where the statutory agreement exist and the authorities failed to discharge their statutory obligation under the said statute.
15. The present writ petition can be treated as an exception to the general rule.
16. It is next contended by the learned counsel for the respondents that as the dispute raised by the petitioners is not a real dispute, the same cannot be referred to the arbitration for its adjudication.
17. Speaking for the Division Bench of the High Court of Jammu and Kashmir in Executive Engineer, Municipality, Jammu v. Inderjit Singh, 1988 KLJ 99: (AIR 1988 J & K 72), Justice Dr. A. S. Anand, held that the scope of enquiry under Section 20 was limited one and was normally to be confined to an enquiry as to whether there is written agreement, the terms whereof provide for arbitra-
tion, and as to whether there was a dispute raised in terms of the agreement.
18. The question as to whether the claim of the petitioner is valid or not is itself arbitrable and the petition cannot be rejected on the pleas raised by the respondents regarding non-existence of a dispute between the parties' which is within the domain of the Arbitrator only.
19. The only condition which is required to be satisfied before issuance of directions for making reference is that there must be a dispute or difference between the parties and that the arbitration agreement must apply to the disputes or differences. At this stage, the Court is not called upon to consider the ultimate outcome of the disputes or differences and not to go into the merits or demerits, of the dispute. The essential conditions necessary to invoke the jurisdiction of the Court for making the reference to the Arbitrator are:--
(a) That the parties must have entered into an arbitration agreement or there existed a statutory arbitration clause;
(b) Such agreement must have been entered into or being in existence with respect to its subject matters sought to be enforced or adjudicated; and
(c) The differences contemplated in the agreement should have arisen between the parties.
If these conditions are satisfied, a party is entitled to invoke the jurisdiction of the Court for referring the dispute to the Arbitrator and the scope of enquiry in that circumstance is very limited. All that the Court is required to see is whether there is an arbitration agreement between the parties and whether the dispute disclosed by the parties is covered by arbitration agreement. If the answer to both the questions is affirmative, the Court had no option but to direct the reference to be made to the Arbitrator.
20. The Supreme Court in 'Wazir Chand v. Union of India, AIR 1967 SC 990, held :
"..... In dealing with an application for filing an arbitration agreement, the Court must satisfy itself about the existence of a written agreement which is valid and subsisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subject-matter of the agreement which is within the jurisdiction of the Court. But the Court is not concerned in dealing that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation; that question falls within the province of the arbitrator to whom the dispute is referred."
21. In view of the preponderance of the authorities of the Apex Court and of the High Courts in the country, it cannot be said that there does not exist a dispute between the parties in the instant case. In view of the fact the existence of the arbitration clause having been admitted, the other points raised by the respondents are arbitrable and are within the domain of the Arbitrator only.
22. Under the circumstances Civil Writ Petition Nos.7819, 12115, 15662, 13882, 13796, 12116 and 15706 of 1995 are disposed of with a direction to the respondents to appoint Arbitrators within two months for adjudication of the disputes raised by the petitioners in their respective writ petitions. The parties shall be at liberty to file their claims and counter-claims before the Arbitrator. The Arbitrator so appointed shall enter upon the reference and decide the same within the statutory period, unless extended under law.
23. The interim directions issued by this Court shall continue till the Arbitrator enters upon the reference whereafter he shall be at liberty to pass afresh interim directions, if so desired.
24. Petitions allowed.