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Madhya Pradesh High Court · body

2002 DIGILAW 73 (MP)

Vinay Kumar Kohli v. Union of India

2002-01-21

S.P.KHARE

body2002
ORDER S.P. Khare, J. 1. This is a revision by the plaintiff against the order by which his appeal under Order 43 Rule 1 (r) C.P.C. challenging the rejection of his application for temporary injunction by the trial Court has been dismissed. 2. It is not in dispute that there was a contract dated 29-9-1995 between plaintiff Vinay Kumar Kohli and defendant No. 3 "Chairman, Cable T.V. Network Committee, Ordnance Factory, Katni" for running a Cable T.V. Network in the factory area for a period of five years. This contract was renewed by Agreement dated 22-9-2000 for a period of three years. Clause 19 (ii) of this Agreement provides : "General Manager, Ordnance Factory, Katni shall be empowered to cancel the contract if there is continuous unsatisfactory service or improper functioning of the system resulting in frequent interruptions." Clause 20 further stipulates "In case of any dispute between the contractor and the nominated/constituted committee by the G.M., O.F., Katni, decision of the G.M., O.F., Katni shall be final". The defendant No. 3 informed the plaintiff by latter dated 19-6-2001: "Since the performances of Cable T.V. Network run by you are not upto the level of satisfaction and as such General Manager, Cable Committee has decided to cancel your contract as per clause 19 (ii) of the Agreement". You are requested to keep continue your services till the new arrangements are made on the same rates/terms and conditions as per Agreement dated 22-9-2001". 3. The plaintiff's case is that he was providing satisfactory service and the system was functioning properly; and it is evident from that fact that his contract was renewed for three years after the expiry of the initial period of five years. One of the grounds for challenging the cancellation of the contract is that the General Manager, Ordnance Factory did not give any opportunity of hearing to the plaintiff and, therefore, the said cancellation of the contract is illegal. The plaintiff claimed the relief of temporary injunction to the effect that the defendants be restrained from allotting the said business to any other person till the decision of the suit. 4. The plaintiff claimed the relief of temporary injunction to the effect that the defendants be restrained from allotting the said business to any other person till the decision of the suit. 4. In reply the defendants have stated that as per terms of the Agreement General Manager, Ordnance Factory is "the arbitrator to decide the dispute" and his decision is binding on the plaintiff and the defendant No. 3; Several complaints were made by the members of the Committee to the Chairman about the poor reception and unsatisfactory service; the defendant No. 3 "referred the above dispute" to the General Manager, Ordnance Factory on 29-5-2001 to decide it and the General Manager has been pleased to pass the order mentioned above to terminate the contract of the plaintiff. It is not disputed in the reply that the General Manager did not give any notice or opportunity of hearing to the plaintiff for deciding this dispute. 5. The suit was filed on 3-7-2001. The trial Court rejected the application of the plaintiff without dealing the point referred above. The relief of temporary injunction was refused because the plaintiff does not possess any licence to run the Cable T.V. Network under the Cable Television Network (Regulation) Act, 1995. This order has been affirmed by the appellate Court. 6. During the course of hearing of this revision, it has been stated on behalf of the plaintiff that the contract has not been cancelled on the ground that he does not have any licence under the said Act to run the T.V. network and, therefore, the Courts below have acted illegally and with material irregularity in rejecting the application for temporary injunction. The plaintiff has now obtained the licence under the said Act. The arguments of both the sides and the intervenor Katni Cable Network Katni have been heard. The defendant No. 3 is said to have entered into a fresh Agreement with the intervenor on 5-9-2001. 7. In the "written submission" on behalf of the respondents it has been stated in para 10 that there is "specific arbitration clause in the agreement". The arguments of both the sides and the intervenor Katni Cable Network Katni have been heard. The defendant No. 3 is said to have entered into a fresh Agreement with the intervenor on 5-9-2001. 7. In the "written submission" on behalf of the respondents it has been stated in para 10 that there is "specific arbitration clause in the agreement". The learned counsel for the respondents and the Intervenor have contended that defendant No. 3 "Cable T.V. Network Committee" is not a statutory committee; it is a private body and not a "State" or its instrumentality and therefore this committee or the General Manager of the Ordnance Factory was not required to observe the principle of natural justice by giving an opportunity of hearing to the plaintiff before the cancellation of the contract. This argument is wholly devoid of any substance. It is the case of the defendants themselves that the General Manager of the Ordnance Factory, by virtue of Clause 19 (ii) of the Agreement is empowered to cancel the contract if there is unsatisfactory service by the plaintiff and he acted as "arbitrator" in deciding the dispute between the plaintiff and the defendant No. 3 Cable T.V. Network Committee. It is also the case of the defendants that the "dispute was referred" by the committee to the General Manager, Ordnance Factory and he has decided it and consequent upon that decision the letter dated 19-6-2001 was sent to the plaintiff. Can an arbitrator decide any dispute without hearing the other side? It is well settled that any Court, arbitrator, conciliator or adjudicator has to hear both the sides in deciding any dispute and if a decision has been arrived at by the "arbitrator" without hearing the other party that decision would be a nullity in the eye of law. An arbitrator is required to observe the celebrated rule in the maxim "audi alteram partem" which means "hear the other side". Both sides must be heard before arriving at any decision. A man in such a case must be given a fair opportunity of answering the case against him. A party is not to suffer in person or in purse without an opportunity of being heard. The duty to afford a hearing to a party is "a duty lying upon everyone who decides anything" in judicial or quasi-judicial capacity. The principle of fairness must be observed. A party is not to suffer in person or in purse without an opportunity of being heard. The duty to afford a hearing to a party is "a duty lying upon everyone who decides anything" in judicial or quasi-judicial capacity. The principle of fairness must be observed. The Supreme Court has observed in Sarat Kumar Dash v. Biswajit Patnaik : that the principle of audi alteram partem is a basic concept of the principle of natural justice. The omnipotency inherent in the doctrine is that no one should be condemned without being heard or given an opportunity to the person affected to present his case before taking the decision or action. Sections 23 and 24 of the Arbitration and Conciliation Act, 1996 specifically provi de for "hearing" to both the sides before any award is passed. 8. The General Manager, Ordnance Factory was admittedly occupying the position of an arbitrator when the dispute was referred to him by the defendant No. 3 Committee; he was acting judicially and, therefore, it was necessary for him to hear the plaintiff before giving any decision on the point whether the service rendered by the plaintiff was "unsatisfactory". Admittedly no such hearing was given to the plaintiff and, therefore, this order appears to be a nullity. The plaintiff has a strong prima-facie case and he would suffer substantial injury by cancellation of the contract which he is having since 1995. The balance of convenience is also in favour of the plaintiff. The Courts below have not considered these vital aspects and therefore the orders passed by them suffer from 'jurisdictional infirmity'. They have concentrated more on the point that the plaintiff at that time was not having a licence under the Act. that was a "non-issue". That was not at all the ground for cancellation of the contract. 9. In view of the above discussion the impugned orders are set aside. The plaintiff's application for temporary injunction is allowed and the defendants are restrained from giving the contract to anyone else until a fresh decision by the General Manager. The operation of the letter dated 19-6-2001 issued by the defendant No. 3 by which the decision of the General Manager, Ordnance Factory has been communicated to the plaintiff so far as it relates to cancellation of the contract is stayed. The operation of the letter dated 19-6-2001 issued by the defendant No. 3 by which the decision of the General Manager, Ordnance Factory has been communicated to the plaintiff so far as it relates to cancellation of the contract is stayed. The General Manager will, however, be free to hear both the sides on the "dispute referred to him" in his capacity as an "arbitrator" in terms of the agreement between the parties and then pass an award as required by the Arbitration and Conciliation Act, 1996.