Delhi District Court
M/S. Unipatch Rubber Ltd vs Mahanagar Telephone Nigam Limited ... on 26 July, 2014
IN THE COURT OF MS. VRINDA KUMARI: ADJ-03 :
PATIALA HOUSE COURTS: NEW DELHI
Arbtn. No. 592/2014
Unique ID No.
M/s. Unipatch Rubber Ltd.
Through Authorised Signatory,
10, Community Centre,
Saket, New Delhi-110017.
........... Petitioner
vs
1. Mahanagar Telephone Nigam Limited (MTNL)
Through its CMD,
Khurshid Lal Bhawan,
Janpath, New Delhi.
2. Shri Ajay Kumar
Ld. Sole Arbitrator
Ministry of Communication & IT,
Dak Bhawan, R.NO. 519,
Parliament Street, New Delhi-110001.
3. Ministry of Communication & IT
Through its ADG (TR)/Concerned Secretary
Department of Telecom,
TR Section, 1408, Sanchar Bhawan
20, Ashoka Road, New Delhi-110001.
......... Respondents
Date of institution : 27.07.2013
Date on which reserve for order : 16.07.2014
Date of decision : 26.07.2014
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ORDER
1. Vide this order, I shall dispose of the issue of maintainability of the present petition U/sec. 34 of the Arbitration Act 1996 r/w sec. 7 B of Indian Telegraph Act filed by petitioner to set aside the Award dated 08.05.2013.
2. The Award 08.05.2013 pertains to dispute between the parties in respect of Lease Circuit between Delhi to Bhiwadi and Delhi to Gwalior. The Arbitrator was appointed for determination and adjudication of the dispute vide DOT HQ Order No. 13-24/1/ARB./2012-TR dated 19.01.2012 in exercise of the power U/sec. 7 B of the Indian Telegraph Act 1885. Statement of claim of Rs. 36,61,212/- (Rupees thirty six lacs sixty one thousand two hundred and twelve only) was submitted by the petitioner alongwith interest and other expenses. The respondent also filed its counter claim for an amount of Rs. 11,74,055/- (Rupees eleven lacs seventy four thousand and fifty five only) with interest against the petitioner. Vide this Award the Arbitrator dismissed the claim of petitioner and allowed the claim of respondent to the tune of Rs. 4, Arbtn. No. 592/2014 2 of 8 38,617/- (Rupees four lacs thirty eight thousand six hundred and seventeen only).
3. The petitioner has assailed this Award on various grounds.
It has been averred that the Arbitrator has not applied his mind on the material on record and has accepted the submissions of respondent (MTNL) as gospel truth. It is further alleged that the Arbitrator acted in a biased manner and did not appreciate that the claim of MTNL was hopelessly time barred. The petitioner has pointed out that the observations of Arbitrator in the Award are highly contradictory. Despite admitting that the Lease Lines in question were dead and further, despite admissions that neither MTNL issued replies to the complaints of the petitioner nor did it rectify the fault in the Lease Lines, the claim of the petitioner was not allowed. The applications of the petitioner moved during the Arbitration Proceedings were not disposed of. To bring the present petition under the pecuniary jurisdiction of this Court, the petitioner has restricted its claim to Rs. 19,99,999/- and has relinquished the balance claim out of the total claim of Rs. 36,61,212/-. The petitioner has prayed for Arbtn. No. 592/2014 3 of 8 setting aside the impugned Award.
4. The case of the respondent is that U/sec. 7 B(2) of the Indian Telegraph Act, the Award made by the Arbitrator is conclusive and binding on the parties and cannot be challenged U/sec. 34 of the Arbitration and Conciliation Act. All the other averments of the petitioner have been denied.
5. In the rejoinder, the petitioner has denied the objections of the respondent on the ground that at the time of enactment of the Indian Telegraph Act 1885, the Arbitration Act was not in force. With the enactment of Arbitration and Conciliation Act 1996, remedy U/sec. 34 of the Act is available without any bar.
6. I have heard the arguments on behalf of both the parties and perused the records carefully. Ld. counsel for the petitioner has prayed for deciding the issue of maintainability of the petition prior to adjudication of this petition on the other grounds relied upon by the petitioner.
7. It has been pointed out by Ld. Counsel for petitioner that the dispute between the parties was referred to the Arbitrator earlier too. Vide an ex-parte Award, the claim of the Arbtn. No. 592/2014 4 of 8 claimant/petitioner was dismissed. The petitioner challenged the said award U/sec. 34 of the Arbitration Act. This petition under Sec. 34 of the Act bearing Arb. No. 166/11 titled as "M/s. Unipatch Rubber Ltd. vs. MTNL & Ors." was decided by the then Ld. ADJ-01, New Delhi District, Ms. Ina Malhotra on 23.11.2011. The respondents had resisted that petition on the ground that objection U/sec. 34 of the Arbitration Act were not maintainable in view of Sec. 7B of the Indian Telegraph Act. Despite such resistance, the Award was set aside by the Court and a new Arbitrator was directed to be appointed. The impugned Award dated 8.05.13 has been passed by the said Arbitrator appointed on the directions of the Court. It has been argued that the said order dated 23.11.11 in Arb. No. 166/11 was not challenged by respondent and therefore, now they cannot take the plea of Sec. 7B (2) of the Indian Telegraph Act again.
8. I have perused the order dated 23.11.11 in Arb. No. 166/11. Perusal of this order shows that when the dispute was earlier referred to the Arbitrator, the petitioner had challenged the appointment of the Arbitrator by way of an application. The Arbtn. No. 592/2014 5 of 8 Arbitrator took up the matter with ADJ(TR) DOT for change of Arbitrator but received no reply. The claimant did not file its claim and persisted for change of Arbitrator. In these circumstances, the Arbitrator chose to commence the proceedings and issued notices to claimant/petitioner. In absence of any claim on behalf of the claimant, the Arbitrator dismissed the claim. This Award was challenged U/sec. 34 of the Arbitration Act in petition No. 166/11. No doubt, my Ld. Predecessor observed that the right of the petitioner to file objections U/sec. 34 of the Arbitration Act cannot be curtailed, however, at the same time, the Ministry of Communication and IT through its ADG (TR) DOT (respondent No. 3 there in) was also directed to constitute a fresh Tribunal for proper adjudication of the dispute between the parties. Copy of order dated 19.01.2012 of ADG (TR) is on record. It shows that the fresh Arbitrator was appointed U/sec. 7 B of the Indian Telegraph Act. The Arbitrator appointed vide this order passed the impugned Award dated 08.05.2013.
9. It is not disputed that the Arbitration Proceedings in Arbtn. No. 592/2014 6 of 8 question in the present petition constitute statutory Arbitration U/sec. 7B of the Indian Telegraph Act. Sec. 7B(2) of the Indian Telegraph Act provides:-
"7B Arbitration of disputes -
(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'."
10. Ld. counsel for the petitioner has argued that Indian Telegraph Act was enacted in 1885 whereas the Arbitration and Conciliation Act came into force in 1996. Being a subsequent enactment, the Arbitration and Conciliation Act 1996 shall prevail. It has also been argued that its Sec. 2(4) and Sec. 2(5) of the Arbitration Act show that the Arbitration Act is applicable to all kinds of Arbitration. Ld. counsel for plaintiff has argued that in Sec. 7 of the Arbitration Act, the phrase 'contractual or not' means that the Arbitration Agreement Act applies to the statutory Arbitration also. The Court is not convinced with this argument. This phrase has been used in context of "Arbitration Agreement" and legal relationship. So far as Sec. 2(5) of the Arbitration Act is concerned, it is not relevant to the controversy before this Court. Sec. 2 (4) of the Act is vital Arbtn. No. 592/2014 7 of 8 though. Sec. 2(4) of the Arbitration Act clearly provides that Part I of the Act except Sections 40(1), 41 & 43 shall apply to every enactment for the time being in force except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder. In view of this provision, Sec. 7B(2) of the Indian Telegraph Act shall prevail upon Sec. 34 of the Arbitration Act. The decision of the Arbitrator under Sec. 7 B of the Indian Telegraph Act is final and cannot be questioned in a Court of Law. The Court agrees with the argument of the Respondents that the remedy available to a subscriber aggrieved by an Award U/sec. 7B of the Indian Telegraph Act is to seek remedial review by way of Writ Petition. The present petition U/sec. 34 of the Arbitration Act challenging the Award U/sec. 7B of the Indian Telegraph Act 1885 is, therefore, dismissed.
File be consigned to record room.
ANNOUNCED IN OPEN COURT ON THIS 26th DAY OF JULY, 2014.
(VRINDA KUMARI)
ADJ-03/PHC/NEW DELHI
26.07.2014
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