Madras High Court
M/S Gemini Communication Ltd vs The Chief General Manager on 19 December, 2012
Bench: R.Banumathi, K.K.Sasidharan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19/12/2012 CORAM THE HON'BLE MRS.JUSTICE R.BANUMATHI AND THE HON'BLE MR.JUSTICE K.K.SASIDHARAN M.P. No.3 of 2012 in O.S.A.No.393 of 2012 M/S GEMINI COMMUNICATION LTD REP BY ITS AUTHORISED SIGNATORY MR.K.RADHAKRISHNAN NO.1 DR RANGA ROAD 2ND ST ALWARPET CH-18 vs THE CHIEF GENERAL MANAGER SOUTHERN TELECOM PROJECTS BHARAT SANCHAR NIGAM LTD 25 GREENWAYS LANE RAJA ANNAMALAIPURAM CH-28 ORDER
This petition is filed under Section 89 C.P.C. to refer O.S.A.No.393 of 2012 for mediation and for amicable settlement.
2. Being aggrieved against the dismissal of O.A.Nos.238 and 239 of 2012 in C.S.No.207 of 2012, the appeals in O.S.A.Nos.238 and 239 of 2012 came to be filed. On 17.10.2012, interim order was obtained by the appellant, which was subsequently modified by the order dated 19.10.2012. On 15.11.2012, BSNL filed application M.P.No.2 of 2012 to vacate the order of interim stay passed in the appeal. Stating that public interest is involved, BSNL insisted to take up the matter at an early date. Accordingly, with the consent of either side, for hearing the arguments in the main O.S.As, the appeals were listed on 26.11.2012.
3. When the matter was taken up for arguments on 26.11.2012, the learned Senior Counsel for appellant stated that the appellant intends to file an application to refer the matter to mediation. On 26.11.2012 when the matter was taken up, we have observed that unless BSNL makes a statement in writing expressing its readiness to go before mediation, the Court is not inclined to refer the matter to mediation. On 26.11.2012, we proceeded to hear the submission of Mr.Shanmugam, learned counsel appearing for appellant in O.S.A.No.394 of 2012 at length and thereafter we have also heard the submissions of the learned Senior Counsel Mr.Srirampanchu in part. When the appeals were posted on 28.11.2012, the application to refer the matter to mediation was brought and in this petition we have heard the submission of learned Senior Counsel Mr.Sriram Panchu on 28.11.2012. We passed the following Order:
2. The original application filed by the appellants in C.S.No.207/2012 to grant interlocutory injunction restraining the respondent from terminating the purchase order and invoking the performance guarantee were dismissed by the learned Single Judge on 21 September 2012. Those two orders were challenged in these intra court appeals. Those two orders were challenged in these intra court appeals. The Division Bench, which admitted the appeal, granted interim orders to preserve the status quo. The respondent on appearance, filed applications to vacate the interim orders. When the matter was mentioned before us by the counsel for the respondent for taking up the interlocutory applications in the presence of the counsel for the appellants, we have agreed to take up the main appeals itself instead of considering the interim applications. Accordingly, the appeals came up for hearing on 26.11.2012.
3. Before the commencement of arguments, on the side of the appellants, the learned counsel for the appellants in O.S.A.No.393 of 2012 submitted that the appellant was advised to move an application under Section 89 of CPC and requested time to file the application. However, the learned Senior counsel for the respondent, on instructions from BSNL, submitted that the respondent is not willing for such a course, more so, on account of the fact that such a suggestion has come only after obtaining interim orders in the appeal. The learned Senior counsel further submitted that the suit itself is not maintainable and as such, the respondent wanted at least the interim applications to be vacated in public interest.
4.Since the matter was specifically posted for final disposal on 26.11.2012, with the concurrence of either side, we directed the appellants to argue the appeal. The learned Senior Counsel for the appellants in in O.S.A.No.393 of 2012 thereafter took us through the background facts by producing a chart. The learned Senior counsel after conclusion of his preliminary arguments submitted that he would make his detailed submissions after the conclusion of arguments by the counsel for appellants in the connected appeal in O.S.A.No.394 of 2012. Accordingly, we heard the counsel for the appellant in O.S.A.No.394 of 2012 at length for 1 = hours. In view of paucity of time, the appeals were adjourned to be taken up today.
5. When the appeals were called today for further hearing, the learned Senior Counsel for the appellant in O.S.A.No.393 of 2012 submitted that the petition filed by the appellant under Section 89 of the CPC has already been numbered and he wanted us to pass orders in the said application. The learned Senior counsel for the respondent on the basis of the counter affidavit filed by BSNL in the said application contended that the respondent is not agreeable for reference to mediation and prayed for a decision on merits.
6. We have heard this matter at length on 26 November2012 and it is posted today for further arguments. We have spent considerable time for hearing this matter without taking up any other items on board. Since the matter is in the part heard stage, we are of the view that no separate orders need to be passed at this juncture in M.P.No.3/2012, filed under Section 89 of CPC.
7. We have heard the arguments of Thiru.R.Shanmugham, learned counsel appearing for the appellant in O.S.A.No.394 of 2012 for nearly two hours. Therefore, we have also heard Thriu.Sriram Panchu, learned senior counsel for the appellant in O.S.A.No.393 of 2012, on merits. Due to paucity of time, the matter is adjourned to be posted tomorrow for continuation. Thereafter, the appeals were listed on 29.11.2012 and further arguments were heard and matters were reserved. In this Petition, we have heard the submission of the learned Senior Counsel on 28.11.2012.
4. Mr.Sriram Panchu, the learned Senior Counsel for petitioner/ appellant submitted that it is in the best interest of the public and the parties that the matter is to be resolved amicably. The learned Senior Counsel submitted that the subject matter, being a commercial litigation, involving public sector undertaking, if parties are referred to mediation, the parties can adopt flexibility in arriving at an amicable settlement and different solutions are possible when the parties go before mediation.
5. Placing reliance upon a decision of Supreme Court in (2010) 8 SCC 24 Afcon Infrastructure Limited and another Vs. Cherian Varkey Construction Company Private Limited and others, it was argued that the dispute, being commercial dispute, it does not fall under the excluded categories of cases and therefore as per the decision of the Supreme Court, reference to mediation is a must. In Afcon's case, the Supreme Court held as under:
26. Section 89 starts with the words where it appears to the court that there exist elements of a settlement. This clearly shows that cases which are not suited for ADR process should not be referred under Section 89 of the Code. The court has to form an opinion that a case is one that is capable of being referred to and settled through ADR process. Having regard to the tenor of the provisions of Rule 1-A of Order 10 of the Code, the civil court should invariably refer cases to ADR process. Only in certain recognised excluded categories of cases, it may choose not to refer to an ADR process. Where the case is unsuited for reference to any of the ADR processes, the court will have to briefly record the reasons for not resorting to any of the settlement procedures prescribed under Section 89 of the Code. Therefore, having a hearing after completion of pleadings, to consider recourse to ADR process under Section 89 of the Code, is mandatory. But actual reference to an ADR process in all cases is not mandatory. Where the case falls under an excluded category there need not be reference to ADR process. In all other cases reference to ADR process is a must.
6. In paragraph No.28 of the above judgment, the Hon'ble Supreme Court categorised the suits and cases of civil nature, which are normally suitable for ADR process. As per category (i), all cases relating to trade, commerce and contract are categorised as the cases normally suitable for ADR process. In paragraph No.36 of the Judgment, the Hon'ble Supreme Court held as under:-
36. If the parties are not agreeable for either arbitration or conciliation, both of which require consent of all parties, the court has to consider which of the other three ADR processes (Lok Adalat, mediation and judicial settlement) which do not require the consent of parties for reference, is suitable and appropriate and refer the parties to such ADR process. If mediation process is not available (for want of a mediation centre or qualified mediators), necessarily the court will have to choose between reference to Lok Adalat or judicial settlement. If the facility of mediation is available, then the choice becomes wider. If the suit is complicated or lengthy, mediation will be the recognised choice. If the suit is not complicated and the disputes are easily sortable or could be settled by applying clear-cut legal principles, Lok Adalat will be the preferred choice. If the court feels that a suggestion or guidance by a Judge would be appropriate, it can refer it to another Judge for dispute resolution. The court has used its discretion in choosing the ADR process judiciously, keeping in view the nature of disputes, interests of parties and expedition in dispute resolution. .... (underlining added)
7. For more than one reason, we are not inclined to consider the request of the appellant to refer the matter to mediation. Section III of Tender for Supply, Installation, Commissioning and Maintenance Support of WiMAX equipment in BSNL across various circles on Turnkey basis contains General (Commercial) Conditions of Contract. Clause 20 of Section III contains Arbitration clause. Clause 20.1 stipulates that in the event of any question, dispute or difference arising under the agreement in connection therewith, which is specifically provided under the agreement shall be referred to the sole arbitration of the Chief General Manager, Southern Telecom Projects, Chennai, BSNL....... Inspite of the above arbitration clause, the appellant has not chosen to invoke the arbitration clause; but only a suit for permanent injunction restraining BSNL from terminating the purchase order came to be filed. In the light of arbitration clause in the contract, the question whether the suit is maintainable itself remains to be seen.
8. It is pertinent to note that request to refer the matter to mediation has not been made at the earliest point of time. The suit was filed as early as in March, 2012 and interim order was obtained on 29.3.2012. Before the learned single Judge, even though the matter was pending for quite some time, there was no request from the appellant to refer the matter for mediation. In the appeals also, even though interim order was obtained on 17.10.2012 and modified on 19.10.2012, no request was made to refer to mediation at an early point of time. Only after BSNL filed application to vacate the interim order and insisted for taking up the appeals at an early date and the appeals were posted for final disposal on 26.11.2012 with the concurrence of either side, the appellant has come up with a request to refer the matter to mediation.
9. In the facts and circumstances of the case and considering the passage of time and public interest involved, we are not inclined to refer the matter to mediation and the petition is accordingly dismissed.
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