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Andhra High Court · body

2001 DIGILAW 1525 (AP)

T. Jayalakshmi v. General Manager, Dept. of Telecommunication

2001-11-23

ELIPE DHARMA RAO

body2001
ELIPE DHARMA RAO, J. ( 1 ) THESE four writ petitions can be disposed of by this common judgment, as the issue involved in all these writ petitions one and the same. ( 2 ) THE petitioners are running Public Telephone Booths, allotted by the first respondent, General Manager, Department of Telecommunications, Visakhapatnam, and when the second respondent the Accounts Officer, billed their telephone calls made from the Booths run by the petitioners, they have disputed the billed amount and for non-payment of the bills, their phones were disconnected and the petitioners and others filed Writ Petition No. 11208 of 1991 which was disposed of by this Court on 12. 9. 1991 directing the respondents to restore the telephone connection on deposit of l/8th of the claimed amount and thereafter directed the petitioner to deposit further l/8th amount demanded and the respondents were further directed to issue notice relating to arrears giving full particulars of calls and in case petitioner disputes the amount,, the matter had to be referred to Arbitrator under Section 7 (B) of the Telegraph Act (for brevity the Act ). Therefore, invoking the power contemplated under Section 7 (B) of the Act, Arbitrator - third respondent was appointed and the Arbitrator entered appearance and after a detailed enquiry into the matter, passed the awards bearing No. X/ ARB/93/vm-60186 dated 28. 2. 1995; X/ ARB/93/vm-50965 dated 23. 2. 1995; X/ ARB/93/vm-7882 dated 12. 2. 1995 and X/ ARB/93/vm-7990 dated 20. 2. 1995 respectively. Questioning the above said award, the present writ petitions are filed, contending that the Arbitrator himself has held that the Accounts Officer did not produce the full particulars of the calls as directed by the Court, there was a gulf of difference between the amounts demanded and the meter reading; that the Arbitrator found that the Accounts Officer could not specify that the equipment is working already during the strike period, that the Arbitrator found that correct particulars of the calls were not furnished and there was a gulf of difference between the amounts demanded and the meter reading and that for the period from April, 1990 to April, 1991, the Arbitrator held that 50% of the total outstanding as arrived by him was waived and the balance 50% was to be paid within 15 days from the date of receipt of the award. Therefore, for all these reasons the awards of the Arbitrator are illegal and is vitiated by error apparent on the face of the award. ( 3 ) FOR better appreciation of the contentions raised by the Counsel for the petitioners, let us have a glance of Section 7 (B) of the Act. ". . . Arbitration of Disputes : (I) Except as otherwise expressly provided in this Act, if any dispute concerning any telegraph line, appliance or apparatus arises between the telegraph authority and the person for whose benefit the lien, appliance or apparatus is, or has been, provided, the dispute shall be determined by arbitration and shall, for the purpose of such determination, be referred to an arbitrator appointed by the Central Government either specially for the determination of that dispute or generally for the determination of disputes under this section. (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. . . . ( 4 ) WHEN there is dispute as regard the amounts claimed in the demands made by the first respondent, the only remedy provided under the Act is by way of arbitration under Section 7 (B) of the Act. Under the above provision of law, the Central Government is given power to appoint the Arbitrator either specially for the termination of that dispute or generally for the determination of disputes under Section 7 (B ). Accordingly when there is dispute with regard to the amounts demanded by the Telephone Department, Arbitrator was appointed. Accordingly, the Arbitrator entered his appearance and passed the awards, which under sub-section (2) of Section 7 (B) are conclusive between the parties to the dispute and shall not be questioned in any Court of law. Thus, the award passed by the Arbitrator has become final and the only remedy available to the petitioners is to approach the High Court invoking extraordinary jurisdiction under Article 226 of the Constitution of India for judicial review of such awards. Evidently, when the awards have become final, it is settled principle of law that the High Court is empowered to scrutinize the award passed by the Arbitrator in the interest of public and, therefore, the High Court has rightly exercised its jurisdiction in admitting the writ petitions. Evidently, when the awards have become final, it is settled principle of law that the High Court is empowered to scrutinize the award passed by the Arbitrator in the interest of public and, therefore, the High Court has rightly exercised its jurisdiction in admitting the writ petitions. ( 5 ) INSOFAR as the contention of the learned Counsel for the petitioners that the conclusions arrived at by the Arbitrator do not support the observations relating to the failure of equipment, negligence on the part of the department and the findings of the Arbitrator are such which no reasonably prudent person would, on the basis of the material available, can come to such conclusions and that the Arbitrator has misdirected himself and erroneously held that there were lapses on the part of the petitioner without stipulating such lapses; that when the Arbitrator has failed to record his reasons in the ward whether the award is correct or not, are concerned, the Supreme Court had an occasion to consider the provisions of law under Section 7 (B) of the Act in a decision ML Jaggi v. Mahanagar Telephones Nigam Limited, AIR 1996 SC 2476 , and held that it is a settled principle of law that reasons are required to be recorded when it affects public interest. It is seen that under Section 7-B, the award is conclusive when the citizen complains that he was not correctly put to bill of the calls he had made and disputed the demand for payment. The statutory remedy opened to him is one provided under Section 7-B of the Act. By necessary implications, when the Arbitrator decides the dispute under Section 7-B, he is enjoined to give reasons in support of his decision since it is final and cannot be questioned in a Court of law. The only obvious remedy available to the aggrieved person against the award is judicial review under Article 226 of the Constitution. If the reasons are not given, it would be difficult for the High Court to adjudge as to under what circumstances the Arbitrator came to his conclusions that the amount demanded by the department is correct or the amount disputed by the citizen is unjustified. The reasons would indicate as to how the mind of the Arbitrator was applied to the dispute and how he arrived at the decision. The reasons would indicate as to how the mind of the Arbitrator was applied to the dispute and how he arrived at the decision. The High Court, though does not act in exercise of judicial review as a Court of appeal but within narrow limits of judicial review it would consider the correctness and legality of the award. The questions are technical matters. But nonetheless, the reasons in support of his conclusion should be given. It was further held as the Supreme Court was delivering the judgment for the first time under Section 7-B of the Act, the principle shall be prospective in operation and the Courts have no jurisdiction to reopen the awards passed by the Arbitrators, which are passed prior to the above said judgment i. e. 2. 1. 1996. The above conclusions were arrived at by the Supreme Court after considering its own judgment in Raipur Development Authority v. M/s. Chokhamal Contractors, AIR 1990 SC 1426 , in which the Supreme Court observed that the law should be allowed to remain as it is until the competent Legislature amends the law and therefore, held that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support except where the Arbitration agreement or the deed of submission or an order made by the Court such as the one under Section 20, or 21 or 34 of the Act or the statute governing the arbitration requires that the Arbitrator or the umpire should give reasons for the award. The award need not contain reasons. It is seen that the decision in that case is based on award of the Arbitrator under the Arbitration Act which itself is founded on an arbitration agreement. So the Supreme Court held that when the agreement is non-statutory award between the parties voluntarily entered into did not contain a clause to make a speaking award, the need to make an award with reasons was not necessary. But at the same time, the Court held that it has to be borne in mind that what applies generally to settlement of disputes by authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settlement of private disputes. But at the same time, the Court held that it has to be borne in mind that what applies generally to settlement of disputes by authorities governed by public law need not be extended to all cases arising under private law such as those arising under the law of arbitration which is intended for settlement of private disputes. ( 6 ) THE Supreme Court while rendering the decision in M. L. Jaggi s case, also considered the ratio in S. N. Mukherjee v. Onion of India, AIR 1990 SC 1984 , wherein it was held that in public law remedy when the order visits with civil consequences, natural justice requires recording of reasons as they are bridge between the order and its maker to indicate how his mind was applied to the facts presented and the decision reached. ( 7 ) IN M. L. Jaggi s case, the Supreme Court set aside the award of the Arbitrator for not giving reasons and remitted the matter to the Arbitrator to make award and give reasons in support thereof. But since the Apex Court was rendering the decision on the said question for the first time, held that it must be treated that any decision made prior to 2. 1. 1996 by any arbitrator under Section 7-B of the Act is not liable to be reopened i. e. , the order was given prospective effect only. ( 8 ) IN another decision Union of India and another v. M. S. Jagajit Industries and another, AIR 1999 SC 2280 , the Union of India filed Special Leave Petition before the Apex Court against the judgment of the punjab and Haryana High Court which set aside the award of the Arbitrator for not giving reasons. But the Supreme Court in view of the decision in M. L. Jaggi s case, as the operation of the judgment was held to be prospective, dismissed the appeal of the Union of India on the ground that the High Court has set aside the award passed by the Arbitrator in that matter on 20. 3. 1993 and, therefore, the award passed by the Arbitrator was not pending for consideration of the High Court on the date of judgment of the Supreme Court in M. L. Jaggi s case. 3. 1993 and, therefore, the award passed by the Arbitrator was not pending for consideration of the High Court on the date of judgment of the Supreme Court in M. L. Jaggi s case. ( 9 ) APPLYING the above said reasoning to the facts and circumstances of this case, the Arbitrator in this case, is under obligation to give reasons to disclose as to show he has applied his mind and came to the conclusion. As alleged by the petitioners, there was failure of equipment during strike and also negligence on the part of the Departmental Officials, and, therefore, any reasonable prudent man, would, on the basis of the material available would come to such a conclusion as was arrived at by the Arbitrator. Therefore, when the matter involves public importance, it is a general principle of law that the Arbitrator has to give reasons, even though the section does not mandate the Arbitrator to give reasons in his award. From the above discussion, it is evident that the Arbitrator based on the terms and conditions of the agreement, if there is a clause in the agreement to pass the award with reasons, the Arbitrator has to give reasons in his award, as to how he came to such conclusions. If the Arbitration agreement does not contain such a clause, as a general rule, the Arbitrator has to give reasons when the award affects civil rights of the parties. Even as per subsection (2) of Section 7b of the Act, the award passed by the Arbitrator is conclusive and will become final. In these circumstances, the Arbitrator should have given reasons in the above said awards. Therefore, I hold that as per Section 7-B of the Act, the awards passed by the Arbitrator have become final and conclusive and the Arbitrator should give reasons, as they affect the rights of the parties and in public interest. But having regard to the decision of the Apex Court in M. L. Jaggi s case, the High Court has no jurisdiction to reopen the awards passed prior to 2-1-1996 by the arbitrator for judicial scrutiny. The awards in these cases, as stated above, were passed prior to 2. 1. 1996 i. e. , in the month of February, 1995, therefore, this Court cannot reopen the award for judicial scrutiny or review. Consequently, all the writ petitions fail and are accordingly dismissed. The awards in these cases, as stated above, were passed prior to 2. 1. 1996 i. e. , in the month of February, 1995, therefore, this Court cannot reopen the award for judicial scrutiny or review. Consequently, all the writ petitions fail and are accordingly dismissed. But in the circumstances without costs.