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10. Aggrieved, Respondent No. 1 filed a writ petition assailing notice dated 17.10.2011 and challenging the jurisdiction of the Arbitrator to proceed further with the matter. The learned Single Judge of the High Court dismissed the writ petition and opined that PMA was constituted by the decision of the Cabinet Secretariat of the Govt. of India as reflected in its Office Memorandum dated 22.01.2004. Though undoubtedly, the Committee of Disputes (COD) was formed based on the judgments of the Supreme Court it has been reversed by the Supreme Court by its subsequent judgment in the case of Electronics Corporation of India Ltd. It did not comment or deal with Constitution of PMA. The PMA was constituted by virtue of an Office Memorandum dated 22.01.2004 issued by the Govt. of India, Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises. It is therefore, not a mechanism which stands effaced by virtue of dissolution of the COD. It cannot be disputed that both Respondent No. 1 and the Appellant are covered under the OM dated 22.01.2004; Respondent No.1 being a Central Public Sector Enterprise, while Appellant is a Nationalised Bank. If that is so, then no consent is required for initiation of arbitration proceedings under the PMA mechanism.

11. The Respondent No. 1 claiming to be aggrieved filed LPA. Vide impugned judgment, the Division Bench of High Court noted that on enquiring from the counsel for Respondent No. 1 as to what is there to show that the claim of Appellant before the Permanent Machinery of Arbitrators (PMA) is with respect to liability prior to 01.04.1994, the counsel for Respondent No.1 referred to the claim petition filed by the appellant before the PMA in which, “Sitaram Mills Ltd.” is referred to as respondent no. 2. It is stated therein that “respondent no. 2 was nationalised w.e.f. 01.04.1994 under the Textile Undertaking (Nationalisation) Act, 1995 and prior to the takeover of the management of respondent no. 2 under the said Act, a sum of money to the extent of Rs. 11,70,39,000/­ became due and payable by respondent No.2 to the claimant”. The Court opined that once it is not in dispute that claims of the appellant lodged before PMA are of the period prior to the appointed day, the liability therefor is not of Respondent No.1. As per the scheme of Textile Undertaking (Nationalisation) Act, the said dues, even though pertaining to the textile undertaking so acquired by the Central Govt. and transferred to respondent No.1, did not become the liability of the Central Govt. or respondent No. 1. The same remained the liability of the earlier owner Company, which significantly was neither taken over under the Textile Undertaking (Nationalisation) Act nor had ceased to exist. The Division Bench held that the Single Judge fell in error in not appreciating the difference between “textile undertaking” and “textile company” and presuming that “Shree Sitaram Mills Ltd.” was taken over when only “Shree Sitaram Mills” i.e. the textile undertaking of “Shree Sitaram Mills Ltd.” was taken over. Moreover, appellant has made the claim for the entire amount before the Commissioner of Payments before whom, as per Section 20 of Textile Undertaking (Nationalisation) Act, only the claims against the earlier owner company were to be made, thereby admitting the liability therefor to be of the earlier owner company only. Concluding that the dues claimed by the appellant being of the period prior to the take­over by the Central Govt. of the textile undertaking earlier owned by Shree Sitaram Mills Ltd., the Division Bench held that Respondent No. 1 cannot be said to be liable therefor and the arbitration proceedings before PMA for recovery thereof against Respondent No. 1 are misconceived. The appeal was accordingly allowed.

15. Though elaborate contentions are urged with regard to the claim put forth by the appellant Bank and the liability for the same being disputed by the respondents namely, Union of India and National Textile Corporation as according to them such liability was not taken over by them, on hearing the learned senior counsel for the parties the contentions would disclose that the consideration required herein is essentially with regard to the forum that is to be provided to the parties for the purpose of appropriate adjudication in that regard. In such forum the liability of the parties and the mode of recovery, if any, is to be ultimately determined. Limited to this aspect an examination of the contentions would disclose that the appellant had initiated the arbitration proceedings before the PMA considering that both, the appellant and the respondent No.1 are Central Public Sector establishments/Bank and as such were governed under the guidelines stipulated in the Office Memorandum dated 22.01.2004. The appellant Bank invoking the same initiated the arbitration proceedings pursuant to which a notice of arbitration dated 17.10.2011 was issued by the learned Arbitrator – Joint Secretary. By Order dated 17.10.2011, the arbitrator directed the parties to file their claims. The appellant­ Bank filed statements of claim and claimed Rs.103,76,04,149.47. In response to the notice dated 17.10.2011, NTC raised objection as to maintainability of the arbitration proceedings before PMA. By its order dated 13.02.2012, PMA directed the appellant­Bank to file its rejoinder and also directed the respondent to file its reply to the rejoinder and directed the parties to appear on or before 28.06.2012. On 17.02.2012, the NTC filed an application praying to decide on the maintainability of arbitral proceedings as a preliminary issue and thereafter, recall the arbitral notice dated 17.10.2011 and to discontinue the arbitral proceedings forthwith. The appellant – Bank objected to the said application and prayed for dismissal of the said application. Rejecting the application filed by NTC dated 17.02.2012, the learned Arbitrator, PMA vide order dated 28.06.2012, directed continuation of the arbitral proceedings

17. As noted it is contended by the learned senior counsel for the appellant the liability was that of M/s Shri Sitaram Mills Ltd. and the claim put forth by the appellant herein is due to the fact that the said Shree Sitaram Mills was taken over by the respondents and in that circumstance the liability also is taken over and is to be liquidated. It is in that premise since the respondent is a Public Sector Enterprise and the appellant is also a Public Sector Bank which was nationalized under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970 the Office Memorandum dated 22.01.2004 was applicable and, therefore, the claim was put forth before the PMA. The reason for which the PMA was brought into existence due to the observations of this Court in the case of ONGC vs. Collector of Central Excise was referred in detail. However, in view of the subsequent observations in Electronics Corporation India Ltd. vs. Union of India & Ors., (2011) 3 SCC 404 wherein this Court having noticed that the mechanism suggested had outlived its utility and diluted the same, a Committee on Disputes (‘COD’ for short) was constituted which was in the nature to examine the claims being put forth. It is further brought to the notice that the present mechanism brought in through the Office Memorandum dated 22.05.2018 is the Administrative Mechanism for Resolution of CPSEs Disputes (AMRCD) wherein a similar consideration as was being made by PMA will be made.