SABITA RANI AGARWAL v. BHARAT SANCHAR NIGAM LIMITED
2011-12-08
SANJIB BANERJEE
body2011
DigiLaw.ai
JUDGMENT 1. The respondent is not represented even at the second call. No affidavit-in-opposition has been filed despite the respondent obtaining directions therefor though a copy of a proposed affidavit has been forwarded to the petitioner. 2. The petitioner refers to the arbitration clause in the agreement between the parties that recognizes that the Chief General Manager of BSNL Telecom Factory, Calcutta or the officer entrusted the duties of Chief General Manager would take up a reference or appoint another as arbitrator. The contract related to the supply of goods by the petitioner to the respondent. 3. As is evident from an order dated April 24, 2009, passed on an application under Article 226 of the Constitution of India, the petitioner complained to this Court that the respondent had sought to unilaterally revise the rates specified in the contract and offered the petitioner a lower price. The writ petition was disposed of by permitting the petitioner herein to accept the lower price without prejudice to its rights and contentions and by observing that the disputes between the parties could be resolved through arbitration since the agreement contained an arbitration clause. An appeal from the order dated April 24, 2009 failed. In the appellate order it was recorded that the arbitration clause had been invoked by the appellant by a letter dated March 27, 2009. 4. On the strength of such recording in the appellate order of June 8, 2009, the petitioner here refers to a document dated March 27, 2009, which is a letter addressed by the petitioner to the Chief General Manager, Bharat Sanchar Nigam Limited at its Telecom Factory at Alipore and carries the caption of “Arbitration in the Alipore Tender Matter.” The body of the letter must be seen in its entirety :- “Dear Sir, With reference to the above Tender No. our representative Mr. S.K. Agarwal has visited your office yesterday and has submitted the sets of documents and had a discussion with you. We would request you to please interim (sic) in this matter and do the needful. Thanking you, …” 5.
S.K. Agarwal has visited your office yesterday and has submitted the sets of documents and had a discussion with you. We would request you to please interim (sic) in this matter and do the needful. Thanking you, …” 5. The petitioner says that since the appellate order read the letter dated March 27, 2009 to be a clear invocation of the arbitration agreement and the respondent had done nothing to start the reference, the petitioner was entitled to carry the present request under Section 11 of the Arbitration and Conciliation Act, 1996 to the Chief Justice of this Court or his designate. 6. The petitioner places another letter of March 26, 2009, again addressed to the same Chief General Manager where the petitioner had referred to the issuance of an “arbitrary letter” by the respondent. The petitioner forwarded copies of several documents to the relevant Chief General Manager under cover of such letter and requested such person to “look into the matter and to take decision as per contract agreement at the earliest possible.” 7. The letter dated March 27, 2009 is no invocation of any arbitration agreement notwithstanding the accidental reference to the word “Arbitration” in its caption. Similarly, the letter dated March 26, 2009 is an appeal to the Chief General Manager to look into the matter but is not a request that would amount to the commencement of arbitral proceedings within the meaning of Section 21 of the 1996 Act. 8. The Chief General Manager in this case wore two hats : that of the highest ranked official representing the respondent in the contract; and, that of the appointing authority under the arbitration agreement. It is not unusual for the highest executive officer of a Government organization being named as the appointing authority in the arbitration agreement. The letters that the petitioner has relied on appear to be more in the nature of appeals to the Chief General Manager in his capacity as an officer of the respondent which, according to the petitioner, had dealt harshly with the petitioner. There is no indication in either letter that the arbitration clause had been invoked or that the addressee was called upon to constitute an arbitral tribunal or even take up the reference himself. 9.
There is no indication in either letter that the arbitration clause had been invoked or that the addressee was called upon to constitute an arbitral tribunal or even take up the reference himself. 9. The fact that the Appellate Court order refers to a letter dated March 27, 2009 does not mean that the same letter of March 27, 2009 that the petitioner has relied on in course of the present proceedings was the one that satisfied the Appellate Court that there was a clear invocation of the arbitration agreement. In any event, as to whether the arbitration proceedings had commenced or not was not a matter which was central to the issue involved in the appeal. 10. For a request under Section 11 of the 1996 Act to be carried to a Chief Justice or his designate, there is a fundamental jurisdictional fact that has to be complied with. The arbitration clause must have been invoked and notwithstanding the request for a reference being made, the appointment must have not made. The Chief Justice or his designate is approached to remedy the breach by a party to an arbitration agreement; or, the Chief Justice or his designate is requested to step in when an appointing authority has failed to discharge the responsibility entrusted to the appointing authority by the parties to the arbitration agreement. Without the failure of the other party to the agreement to constitute the arbitral tribunal or the failure on the part of the appointing authority to do so, depending on the wording of the arbitration agreement between the parties, the Chief Justice or his designate would not have the authority to entertain an application for constitution of the arbitral tribunal. 11. It is on such ground that the present request under Section 11 of the 1996 Act is not entertained. The petitioner will have liberty to pursue whatever remedies that may be available to the petitioner, including making a subsequent request for a reference, if otherwise permissible, and carrying another petition under Section 11 of the 1996 Act upon the pre-conditions thereto being complied with. 12. There will be no order as to costs. 13. Urgent certified photocopies of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.