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1994 DIGILAW 373 (DEL)

KESAR ENTERPRISES LIMITED v. UNION OF INDIA

1994-05-23

A.D.SINGH, M.JAGANNADHA RAO

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ANIL DEV SINGH, J. ( 1 ) THIS order will govern two appeals, namely, FAO (OS)Nos. l25and 126 of 1994 which arise from the order of the learned Single Judge dated March 23, 1994 whereby the applications of the appellants undersection 20 of the Arbitration Act, 1940 have been rejected. ( 2 ) THE appellants entered into deeds of licence with the President of India through Divisional Superintendent, Northern Railways,new Delhi, in respect of pieces of lands contiguous to railway line at Shakurbasti. According to clause 17 occurring in each of the deeds, the licence fee is liable to be revised at any time at the discretion of the Administration after the service of one month s notice on the licensee of the Administration s intention to revise the licence fee. The said clause reads as under: "that the licence fee stipulated in this agreement is liable to be revised at any time at the discretion of the Ad ministration after the service of one month s notice on the licensee of the Administration s intention to revise the licence fee. The licensee shall he bound to pay the licence feeat the revised rate, from the date mentioned in the above said notice. " ( 3 ) IT appears that from time to time the Railway Administration increased the licence fee but no dispule seems to have been raised in regard to the revision of licence fee till 1981 /1982. The appellant in FAO (OS) No. 125/94 feels aggrieved by the revision of licence fee by the Railway Administration with effect from March 1, 1982 vide their letter dated November 4, 1982 and subsequent increases in the licence fee by various letters from December 5,1982 to March 31, 1986. Appellant in FAO (OS) 126 of 1994 also faced the same problem of increase in the licence fee. Since the appellants failed to deposit licence fee at the enhanced rate, the licences were terminated and thereafter proceedings for eviction under Public Premises (Eviction of Unauthorised Occupants) Act,1971 (for short "public Premises Eviction Act") wen. initiated against the appellants. The appellants then filed two petitions undersection 20 of the Arbitration Act,194 () alongwith applications for stay of the proceedings intitiated under the Public Premises Eviction Act. initiated against the appellants. The appellants then filed two petitions undersection 20 of the Arbitration Act,194 () alongwith applications for stay of the proceedings intitiated under the Public Premises Eviction Act. The learned Single Judge by a composite order dated March 23, 1994 dismissed the applications of the appellants on the grounds inter alia that the premises in question are public premises to which the provision of the Public Premises Eviction Act are applicable and the peti tions under Section 20 of the Arbitration Act are not maintainable as the arbitrator will have no jurisdiction in the matter since it falls within the purview of Sections 7 and 15 of the former Act. ( 4 ) WE find that the abovesaid order of the learned Singlejudge is unexceptional. The submission of the learned counsel for the appellants that the aforesaid clause 17 confers arbitrary power on the Railway administration to increase the licence fee and the actual increase in the licence fee by the Railway Administration under the said clause was arbitrary and violative of Article 14 of the Constitution of India cannot be a subject matter of determination by the arbitrator. The arbitrator being the creature of the agreement can not declare the same or any part of it to be void or invalid. In private law field there is no scope for applying the doctrine of arbitrariness. Excess of the State can bechecked under Article 14 of the Constitution only by public law remedy which the petitioner did not avail of despite the fact that the increase in the licence fee of which the appellants are aggrieved of initially took place in the year 1982. At this stage it will be necessary to extract the arbitration clause, which reads as under: "19. In the event of any question, dispute or difference arising under these presents or in connection therewith (except as to any matters the decision of which is specially provided for by these presents), the same shall be referred to the sole arbitration of an officer Appointed to be the arbitrator by Divnl. Supdt. Rly. Delhi. In the event of any question, dispute or difference arising under these presents or in connection therewith (except as to any matters the decision of which is specially provided for by these presents), the same shall be referred to the sole arbitration of an officer Appointed to be the arbitrator by Divnl. Supdt. Rly. Delhi. It will be no objection that the arbitrator is a Government servant, that he had to deal with the matters to which these presents relate or that in the course of his duties as a Government servant he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to these presents. . . . . . . . . . . . . . . . . . . . . . ( 5 ) ACCORDING to the above clause excepted matters in regard to which the decision of the Railway Administration is provided for are excluded from its purview. Under clause 17 the Railway administration is entitled to take a decision in regard to the question of increase of the licencee fee. This matter is therefore outside the lour corners of the clause 19 and even otherwise the arbitrator will have no jurisdietion in the matter in view of Sections 7 and 15 of the Public Premises Eviction Act. ( 6 ) IN view of the above discussion, we find no merit in the appeal which is hereby dismissed in limine.