Delhi High Court
The Management Committee Of Montfort ... vs Mr. Vijay Kumar And Ors. on 4 April, 2002
Equivalent citations: 2002IVAD(DELHI)221, 2002(64)DRJ51
Author: Mahmood Ali Khan
Bench: Mahmood Ali Khan
JUDGMENT Mahmood Ali Khan, J.
1. This petition filed under Article 227 of the Constitution of India raises a short but interesting question. The question is whether Delhi School Tribunal (hereinafter the Tribunal) while hearing an appeal of a dismissed employee of a school preferred under Section 8(3) of Delhi School Education Act (in short the Act) was required to refer the appeal to an arbitrator on an application being filed before it by the petitioner under Section 8(1) of the Arbitration & Conciliation Act.
2. The factual matrix of the case, the disclosed by the pleadings of the parties, may be set out summarily as follows. The petitioner is the management committee of an unaided minority school, known as Montfort Senior Secondary School. The respondent Mr. Vijay Kumar was working as an Assistant Teacher in that School. Pursuant to the disciplinary action taken against him the petitioner Managing Committee of the school terminated his services by order dated 04.5.2000 against which the dismissed employee preferred an appeal to the Tribunal under Section 8(3) of the Act. The petitioner filed an application under Section 8(1) of the Arbitration and Conciliation Act, 1996 before the Tribunal. The Tribunal dismissed this application by order dated 07.6.2001, which is impugned in this petition. He extensively quoted the judgment of the Supreme Court in Frank Antony Public School v. Union of India, and the decision of the nine judges Constitution Bench of the Supreme Court in Ahmedabad St.Xaviers College Society v. State of Gujarat, which made the provision of Chapter IV of the Act. barring Section 8(2) applicable even to the employees of an unaided minority schools and held that Section 12 of the said Act is inapplicable to that extent.
3. The petitioner invoked the provision of the Section 8(3) for challenging the order of termination of his service before the Tribunal. The petitioner management of the school on noticing filed an application under Section 8(1) of the Arbitration and Conciliation Act for referring the appeal to an arbitrator in terms of the arbitration clause contained in service rules by virtue of provision of Section 15 of the Act.
4. Before adverting to the argument of the parties, it will be necessary to set out a few relevant provisions of the Act and the Arbitration and Conciliation Act, 1996. Montfort Sr.Sec.School, which was the employer of the respondent teacher was an unaided minority school and was governed by the provisions of the Act so far as they were specifically enacted for such institutions. Section 12 of the Act specifically excluded the application of the provisions of Chapter IV of the Act to a unaided minority institution. This chapter, inter alia, comprised of Section 8. In this case this court is concerned with the provision of Section 8(3) of the Act which provides for an appeal against an order of the dismissal or removal from services or reduction in rank of an employee of recognized private educational institution to the Tribunal constituted in accordance with Section 11 of the Act. To be precise, Sub-section (3) of Section 8 reads as under:-
"Any employee of a recognized private school who is dismissed, removed or reduced in rank may, within three months from the date of communication to him of the order of such dismissal, removal or reduction in rank, appeal against such order to the Tribunal constituted under Section 11."
5.The Tribunal, as seen above, is constituted under Section 11 of the Act. Reproduction of this Section may be necessary to determine the exact nature of this Tribunal as whether it is a 'judicial authority' within the ambit of Section 8(1) and other provisions of the Arbitration and Conciliation Act. Section 11 reads as under:
Tribunal .....
(1) The Administrator shall, by notification, constitute a Tribunal, to be known as the "Delhi School Tribunal", consisting of one person:
Provided that no person shall be so appointed unless he has held office as a District Judge or any equivalent judicial office.
(2) If any vacancy, other than a temporary absence, occurs in the office of the presiding officer of the Tribunal, the Administrator shall appoint another person, in accordance with the provisions of this section, to fill the vacancy and the proceedings may be continued before the Tribunal from the stage at which the vacancy is filed.
(3) The administrator shall make available to the Tribunal such staff as may be necessary in the discharge of its functions under this Act.
(4) All expenses incurred in connection with the Tribunal shall be defrayed out of the Consolidated Fund of India.
(5) The Tribunal shall have power to regulate its own procedure in all matters arising out of the discharge of its functions including the place or places at which it shall hold its sitting.
(6) The Tribunal shall have power to regulate its own procedure in all matters arising out of the discharge of its functions including the place or places at which it shall hold its sitting.
(7) The Tribunal shall for the purpose of disposal of an appeal preferred under this Act have the same powers as are vested in a court of appeal by the Code of Civil Procedure, 1908, (5 of 1908) and shall also have the power to stay the operation of the order appealed against on such terms as it may think fit."
6. Even at the risk of repetition it may be noted here that Section 8(3) of the Act was not available to an employee of a recognized unaided minority school for preferring an appeal before the Tribunal against the order of dismissal, removal from service or reduction in rank. This section was made applicable to such employees by virtue of the judgment of the Supreme Court in Frank Anthony Public School (supra) and Ahmedabad St.Xaviers College Society (supra).
7. The petitioner, however, has strenuously urged that the Tribunal has failed to take notice of the provision of Section 15 of the Act and the contract of service entered into between the parties which contained an arbitration clause. The petitioner has annexed the service rules for the staff of the school which were framed in accordance with Section 15 of the Act. It contained an arbitration clause framed in terms of Clause (e) of Sub-section (3) of Section 15. Section 15 being relevant for determining the question raised in this petition, is reproduced as under:-
"Contract of Service .....
(1) The managing committee of every unaided minority school shall enter into a written contract of service with every employee of such school:
Provided that if, at the commencement of this Act, there is no written contract of service in relation to any existing employee of an unaided minority school, the managing committee of such school shall enter into such contract within a period of three months from such commencement:
Provided further that no contract referred to in the foregoing proviso shall vary to the disadvantage of any existing employee the term of any contract subsisting at the commencement of this Act between him and the school.
(2) A copy of every contract of service referred to an Sub-section(1) shall be forwarded by the managing committee of the concerned unaided minority school to the Administrator who shall, on receipt of such copy, register it in such manner as may be prescribed.
(3) Every contract of service referred to in Sub-section(1) shall provide for the following matters, namely:
(a) the terms and conditions of service of the employees, including the scale of pay and other allowances to which he shall be entitled;
(b) the leave of absence, age of retirement, pension and gratuity, or, contributory provident fund in lieu of pension and gratuity, and medical and other benefits to which the employee shall be entitled;
(c) the penalties which may be imposed on the employee for the violation of any Code of Conduct or the breach of any term of the contract entered into by him;
(d) the manner in which disciplinary proceedings in relation to the employee shall be conducted and the procedure which shall be followed before any employee is dismissed, removed from service or reduced in rank;
(e) arbitration of any dispute arising out of any breach of contract between the employee and the managing committee with regard to.....
(i) the scales of pay and other allowances,
(ii) leave of absence, age of retirement, pension, gratuity, provident fund, medical and other benefits,
(iii) any disciplinary action leading to the dismissal or removal from service or reduction in rank of the employees;
(f) any other matter which, in the opinion of the managing committee ought to be, or may be, specified in such contract.
8. This provision specifically applies to unaided minority schools. Montfort Sr.Sec.School, of which the petitioner is the managing committee is one such school. It has entered into a contract of service with the respondent in the form of the service rules framed by it which are applicable to all its employees. Service rules are annexure-P to the petition and are at page 54 of the paper book. Inter alia, it provided the code of conduct, disciplinary proceedings for violation of it and the penalties which could be imposed on the delinquent employee. Clause 31 of rules provided as follows: "If the employee feels aggrieved against the decision of the Discipline Committee or of the managing Committee, he has the right to appeal to the arbitrator, appointed as such, by the Society. His decision shall be final and binding on both parties". It is not disputed that both the parties, the petitioner management and the respondent teacher were subject to this rule and it formed part of the contract of service between the respondent and the petitioner management committee of the school.
9. The contract of service between the parties, as such, has a arbitration clause. In the event of termination of service of employee consequent to disciplinary action against him, the affected employee had a right to prefer an appeal to the arbitrator which was to be appointed by the managing committee. This clause was inserted in the rules in accordance with Sub-section (3) of Section 15 of the Act. In accordance with this provision the contract of service between the employee and the unaided minority school was to provide for, inter alia, for the arbitration of the dispute arising out of the breach of contract between the employee and the managing committee with regard to "any disciplinary action leading to the dismissal or removal from service or reduction in rank of the employees". In this case the respondent has been terminated from the service on account of a breach of contract between the parties which led to the disciplinary action against him. Pursuant to the disciplinary enquiry report, he was dismissed and removed from the service.
10. Referring to the judgment of the Division Bench of this court in Union of India v. Bharat Engineering Corporation 2nd (1997) II Delhi 57 counsel for respondent has argued that the arbitration agreement as defined by Section 2(b) of the Arbitration and Conciliation Act is a bilateral agreement and not unilateral. It is held in this case that an arbitration agreement as defined in Clause(a) of Section 2 of the Arbitration Act 1940 the agreement has to be bilateral and both the parties must have been given right of reference. The agreement should not be contingent or conditional or confer option to a party but contract of option becomes an arbitration agreement in exercise of that option. Argument of counsel is that Sub-clause(iii) of Clause(e) of Sub-section(3) of Section 15 and Rule 31 of the service rules confers right of appeal to only one of the parties, i.e. the employee who has been dismissed or removed from service or reduced in rank, therefore, it is not a bilateral agreement. He has argued that the definition of the arbitration agreement given in Section 2(1)(b) read with Section 7 of Arbitration and Conciliation Act, 1996 is in no way different and distinguishable from an arbitration agreement defined under Clause(a) of Section 2 of the old Arbitration Act, therefore, the ratio of the judgment of the Division Bench aforesaid is equally applicable to it. It is argued that it is not an arbitration agreement envisaged in the Arbitration and Conciliation Act. The Tribunal had no power and jurisdiction to refer the appeal to an arbitrator under Section 8(1) of the Arbitration and Conciliation Act for adjudication in accordance with the said Act.
11. Conversely, argument of counsel for petitioner is that is being a statutory arbitration agreement, the provisions of Arbitration and Conciliation Act are equally applicable over such an arbitration agreement, therefore, the Tribunal had no option but to refer the appeal to the arbitrator by virtue of Section 8(1) of the Arbitration and Conciliation Act and it had no jurisdiction to decide the appeal and proceeding before him would be barred by Section 5 of the Arbitration and Conciliation Act.
12. Before proceeding further to discuss the matter, it will be necessary to produce the provisions of Section 5 and 8 of the Arbitration and Conciliation Act. They are extracted below:-
"5. Extent of judicial intervention .....
Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.
8. Power to refer parties to arbitration where there is an arbitration agreement .....
(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in Sub-section(1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under Sub-section(1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and in arbitral award made.
13. The jurisdiction of civil court in dealing with any dispute relating to or arising out of an arbitration agreement is clearly restricted and barred to the extent provided in Section 5. If there was an arbitration agreement, the provisions of Arbitration and Conciliation Act are attracted and the civil court will deal with those dispute only to the extent which is permitted by the special statute relating to the arbitration and proceedings arising there from. Section 8 on the other hand enjoins upon "a judicial authority"
before which an action is brought in a matter which is a subject of an arbitration agreement to refer the parties to the arbitration. The only condition precedent is the parties should apply not later than submitting the first statement on the subsistence of the dispute before that authority.
14. One more section of Arbitration and Conciliation Act needs attention. It is Section 2(4), which embraces a statutory arbitration within the ambit of an arbitration agreement over which the provisions of the Arbitration and Conciliation Act are applicable. It is as under:-
"2(4). This pat except Sub-section(1) of Section 40, Sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made there under."
15. A reading of provision of Section 15 of the Act and the provisions of Section 2(4) of the Arbitration and Conciliation Act clearly show that Rule 31 of Service Rule was a statutory arbitration agreement between the parties.
16. A bilateral arbitration is the conscious act of the parties to that agreement. On the other hand a statutory arbitration is the creation of statute. It does not require consent of the parties for its application. Section 15(3)(e)(iii) is one such statutory arbitration incorporated in the Service Rule which regulate the conditions of service of the respondent. Therefore, merely because right of appeal to an arbitration is given only to the employee it will not take it out of the purview of 2(4) of the Arbitration and Conciliation Act. The argument of the counsel for the respondent to the contrary is not tenable and is repelled.
17. The pertinent question next arises whether the Tribunal is a "judicial authority" within the meaning of Sub-section(1) of Section 8 of the Arbitration and Conciliation Act. The expression "judicial authority"
has not been defined under the said Act. The argument of counsel for petitioner is that the Tribunal has all the trapping of a court. The District Judge or an equivalent judicial officer is the presiding officer of the Tribunal, the expenditure incurred on the Tribunal is defrayed from the Consolidated Funds of India, the Tribunal is vested with the power to regulate its own produce and for this purpose of disposal of an appeal preferred under Section 8(3) of the Act the Tribunal is vested with the same powers as are vested in a court of appeal under the Civil Procedure Code. It also has power to stay the operation of the order appeal against. He, therefore, urged that the bare reading of the provision of Section 11, which has been reproduced in forgoing paragraphs would show that the Tribunal has all the necessary powers which an appellate civil court has for deciding an appeal and pass interim stay orders. He also invited attention to Section 25 of the Act which barred the jurisdiction of the civil court "in respect of any matter in relation to which..... or an authority appointed or specified by or under this Act, is empowered by or under this Act to exercise any power.....". According to him finality has been attached to the order of the Tribunal subject to any judicial review under Article 26/227 or Article 32 of the Constitution of India. He sought support to his arguments from the judgment of a Division Bench of Punjab and Haryana High Court in A.L. Mehra v. The State which after elaborate discussion on various judgments and authorities explained the meaning of the words "act judicially" and "judicial power". Since provision of Section 11 of the Act clearly vest all the powers of a civil appellate court in the Tribunal while dealing with an appeal preferred before it under Section 8(3) of the Act, I need not discuss in detail as to who were the judicial authority apart from the courts. Suffice to mention a few cases which deal with the judicial powers and the administrative powers exercised by an authority.
18. In Regina John M'Evoy v. Dublin Corporation (1878) 2 LR Ir.371(D) it was observed as under:-
"the term 'judicial' does not necessarily mean acts of a judge or legal tribunal sitting for the determination of matters of law, but for the purpose of this question a judicial act seems to be an act done by competent authority, upon consideration of facts and circumstances, and imposing liability or affecting the rights of others."
In Huddart Parker and Co. v. Moorehead , (1909) 8 CLR 330(E) judicial powers were defined as under:-
"The words 'judicial power' as used in Section 71 of the Constitution mean the power which every sovereign authority controversies between its decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action".
In Rex v. London County Council (1931) 2 KB 215 (F) judicial authority was defined as under:-
"It is not necessary that it should be a Court in the sense in which this Court is a Court; it is enough if it is exercising, after hearing evidence, judicial functions in the sense that it has to decide on evidence between a proposal and an opposition; and it is not necessary to be strictly a Court."
19. In Royal Aquarium and Summer and Winter Garden Society, Limited v. Parkinson, (1892) 1 QB 431 dealing with the meaning of the word 'judicial' it was observed as under:
"The word 'judicial' has two meanings. It may refer to the discharge of duties exercisable by a judge or by justices in Court, or to administrative duties which need not be performed in court, but in respect of which it is necessary to bring to bear a judicial mind that is, a mind to determine what is fair and just in respect of the matters under consideration."
A full Bench of Nagpur High Court in Bhailal v. Additional Deputy Commr. Akola and Anr. AIR 1953 Nagpur 89 made following observation:
"From this quotation it is clear that the term 'judicial' embraces even the acts of special tribunals which though administrative in character perform functions resembling those of Courts."
20. As such, when an authority other than a court in the ordinary sense, is in discharge of the duties expected to act fairly and honestly or exercises some of the powers akin to the powers of a civil court it may not be a court in its strict sense but it would essentially fall within the definition of a judicial authority. It is bound by law to act on the facts and circumstances as determined upon the enquiry in which a person who is to be affected is given full opportunity to place his case. Section 11(6) of the Act vested in the Tribunal the power to (i) give the parties opportunity of presenting their dispute orally or in writing; (ii) consider the evidence produced by the parties which culminated into the order subject matter of the appeal or produced in appeal; (iii) consider all the questions of law to which the parties were subjected which were applicable in the case of the parties; and
(iv) give a verdict disposing of whole of the matter. The decision which such a Tribunal gives is a judicial decision. Support to this view can be had from the judgment of the Supreme Court in Bharat Bank v.
Employees of Bharat Bank wherein Industrial Tribunal was held to have all necessary attributes of a court of justice and; Parduman Singh v. State of Punjab wherein it was held that a Custodian of Evacuee Property has to decide the question of cancellation of allotment under Section 26(1) of Administration of Evacuee Property Act by a judicial decision. In Canara Bank v. Nuclear Power Corporation of India Ltd. (1995) 3JT SC42, the Supreme Court held that a Company Law Board was a court exercising the functions of the court. No challenge has been made to the argument of counsel for petitioner that the Tribunal is a judicial authority within the meaning of Section 8(1) of the Arbitration and Conciliation Act.
21. Now interesting but crucial question is whether the appeal filed by the respondent was required to be referred to the arbitrator appointed in terms of service rules framed under Section 15(3) of the Act or the Tribunal could proceed to hear appeal preferred before him under Section 8(3) of the Act. Section 15 provides hearing of appeal by an arbitrator whereas Section 8(3) give right to the Tribunal to hear such appeal. Needless to mention that the judgment of the Supreme Court which held that the provision of Chapter VI of the Act except the provisions of Section 8(2) was applicable to the employees of an unaided minority school i.e. the parties to this case is the law of the land and this court is bound by it. Therefore, it shall be assumed that the provisions of Section 8(3) was available as an alternative remedy to the respondent for challenging the order of his termination/dismissal from service.
22. The Supreme Court in the judgment of the Frank Anthony Public School (supra) and the Nine Judges Constitution Bench in Ahmedabad St.Xaviers College Society (supra) had taken note of the scheme of the Act, various provisions which were applicable to the recognized un-aided minority schools and to others. The court was very much conscious of the provision of Section 15 of the Act, which provided for a clause in the service contract regarding hearing of the appeal by an arbitrator After keeping in view of all the provisions of the Act the Supreme Court laid down that the provision of Section 8(3) of the Act was applicable to the employees of unaided minority school also. At first glance the provision of Section 15 and 8(3) of the Act seems to be self-contradictory but if one reads the judgments of the Supreme Court in the above referred two cases carefully it is not difficult to comprehend the reasons for giving benefit of Section 8(3) to the employees of recognized unaided minority schools at par with their counterpart in private schools. Juxtaposed these two provisions serve the same purpose. One provides for an appeal to an arbitrator and the other allows a dissatisfied employee to approach the Tribunal for judicial scrutiny of the disciplinary action. They may not be construed to be contradictory in true sense but two alternative remedies for achieving same object. They, of course, cannot be resorted to simultaneously or one after the other and are mutually exclusive. Once a remedy provided under Section 15 or 8(3) is exhausted the effected party will be debarred from invoking the other remedy for redressing its grievance. Both the statutory provisions give right of appeal only to one of the parties to dispute i.e., the dissatisfied employee and once the right given is exercised the opposite party cannot scuttle that right by raising objection that right should have been exercised in the manner or procedure provided in the alternative provision.
23. Can the provision of Section 8(3) of the Act which is also applicable to the case of the respondent could be made nugatory on the plea of the petitioner that the dispute was referable to an arbitrator? The respondent had two options; one given by Section 15 read with the service contract framed in conformity with it and the second which gave a right to challenge the dismissal / termination from service before a judicial authority in an appal. Once he had exercised this option, to my considered view, it would not be open to the petitioner to challenge this appeal on the ground that the dispute could have been referred for arbitration under another provisions of the Act. The Tribunal, therefore, was right in rejecting the application of the petitioner in the light of the judgment of the Supreme Court in Frank Anthony Public School(supra) and Ahmedabad St.Xaviers College Society (supra). There is no legal infirmity in this order.
24. The petition is filed under Article 227 of the Constitution of India which gives this court discretionary jurisdiction of superintendence and control over subordinate courts and the Tribunals. High Courts power of superintendence is exercised to keep the subordinate courts and Tribunals within the bounds of their authority and to see that they do what their duty requires and that they do it in a legal manner. The jurisdiction of superintendence over courts and Tribunal is exercised in exceptional or special circumstances and where it would be appropriate to interfere with the order. Mere wrong order without anything more is not enough to attract this jurisdiction. In the instant case it cannot be said that the learned Tribunal has exceeded his jurisdiction or his order is not warranted by law. His order is in accordance with judgment of Supreme Court. There is no reason for this court to interfere with it. For the reasons stated above. I do not find any merit in the petition. It is dismissed.