ORDER : 1. The petitioner, being the claimant, has filed this application seeking to quash the award dated 13-7-2000 passed by the Arbitrator-cum-Area Manager, Telecom (City), Office of the G.M. Telecom, Cuttack under S.7B of the Indian Telegraph Act, 1885, directing to pay the outstanding amount of Rs. 8,40,568.00/- in forty equal instalments, the last date of each instalment will be 7th of every month starting from the month of August, 2000. 2. The factual matrix of the case, in hand, is that the petitioner is the former member of Parliament (10th Lok Sabha) from Kalahandi Constituency in the State of Odisha. He continued in office from 1991 up to 15th May, 1996. Being a member of Parliament, he was provided with certain privileged facilities including telephone facility. Such facility is governed under the Housing and Telephone Facilities (Members of Parliament) Rules, 1956. The said Rule has been framed in exercise of the power conferred by the Central Government under the Salary and Allowances of Member of Parliament’s Act, 1954. In terms of the aforesaid Rules, as it stood prior to the amendment on 30th August, 1997, a Member of Parliament was entitled to have one telephone at his residence or office at New Delhi and another telephone at his usual place of residence or at a place selected by him and was provided with 25,000 free calls per annum, from each telephone. The calls made from the said two telephones are pooled together and thus, a Member of Parliament is not required to make the payment in respect of 50,000 calls from the two telephones, during a year. The excess calls made over and above the pooled 50,000 free calls per annum can also be adjusted against the 50,000 free calls for the next year. In terms of Rules 444 to 453 of P & T Manual (Volume-XIV), the charges for the local calls to the extent of 50,000 calls in respect of the two telephones in a year are borne by the Lok Sabha/Rajya Sabha Secretariat, as the case may be, and the charges for the calls in excess thereof, are billed against the concerned Member of Parliament and are deducted from his/her salary through the Secretariat.
Accordingly, the petitioner by virtue of his status as a Member of Parliament, was provided with one telephone bearing No. 379-2116 at New Delhi and another telephone bearing No. 330353 at his Constituency at Bhawanipatna. The telephone at New Delhi operated from 25-6-91 till 23-5-96 and during his tenure as a Member of Parliament, he was never served with any bill nor any amount was ever deducted from his salary towards the charges for excess call and as such, the petitioner was all along under a bona fide impression that the call made from the two telephones are well within the permissible limit of 50,000 calls per annum. However, after dissolution of the 10th Lok Sabha, the petitioner was served with a bill of Rs. 4,26,963/- towards the charges for the alleged excess calls over and above the free calls as aforesaid. Consequently, the petitioner made a representation to the then Minister of Communications, Govt. of India and also raised a dispute before the appropriate authority for correction of the bills. In the meantime the bill amount has been increased up to Rs. 8,40,568/- out of which the petitioner has already paid Rs. 53,000/- without prejudice to his contention and after lot of persuasion, the Assistant Director General (TR) in the Department of Telecommunication, by a letter dated 17-9-99, appointed Sri B. Mallick, the then Director (RTTC), Bhubaneswar as the Arbitrator to resolve (he dispute. The Arbitrator passed the impugned award on 13-7-2000 by which the petitioner has been made liable to pay a sum of Rs. 8,40,568/- in 40 equal instalments payable within 7th of each month, starting from August, 2000. Hence this application. 3. Mr. S.K. Dash, learned counsel for the petitioner assails the award passed by (he Arbitrator under S.7B of the Indian Telegraph Act, 1885, (hereinafter referred to as "the Act") on the ground that the Arbitrator has passed an unreasoned award, more so the award so passed is without jurisdiction as (he Arbitrator has not been appointed by the Central Government as required under S.7B of the Act, thereby the award having been passed by the authority having no jurisdiction, is a nullity in the eye of law.
To substantiate his contention, he has relied upon the judgments in M/s. Fly Wings Travels (P) Ltd. v. Mahanagar Telephone Nigam Ltd. and another, AIR 1995 Delhi 71 and M.L. Jaggi v. Mahanagar Telephones Nigam Ltd. AIR 1996 SC 2476 . 4. Per contra, Mr. P.R. Barik, learned counsel appearing for opposite party Nos. 2 to 4 states that the petitioner being a member of Parliament was using the telephone beyond the limit prescribed and he used both local and STD facilities. For such use, liberal bills were issued to the Lok Sabha Secretariat, the petitioner being a liberal user facilities exhausted its quota and went into arrears of the dues and supported the award stating that the petitioner having submitted to the jurisdiction of the Arbitrator and having participated in the proceeding, cannot be allowed to contend that the Arbitrator has no jurisdiction to pass the award, which is absolutely a misconceived one. He further stated that the award passed by the Arbitrator is just and reasonable one and does not suffers from any legal infirmity, therefore, he seeks for dismissal of the writ petition being devoid of any merits. 5. On the basis of the facts pleaded above, the following questions emerges for consideration. (i) Whether the award so passed is in violation of S.7B of the Act as he has not been appointed by the Central Government? (ii) Whether an unreasoned award passed by the Arbitrator can sustain in the eye of law? (iii) To what relief? 6. Section 7B of the Act reads as follows: "7B. Arbitration of disputes.- (1) 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 line, appliance or apparatus is, or has been provided, the dispute shall be determined by arbitration and shall, for the purposes 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 (he parties to the dispute and shall not be questioned in any Court." 7.
(2) The award of the arbitrator appointed under sub-section (1) shall be conclusive between (he parties to the dispute and shall not be questioned in any Court." 7. On perusal of the above mentioned pro-visions, it appears that a statutory remedy is provided under the Act and, therefore, in a dispute as regards to the amount claimed in (he demand raised, the only remedy provided is by way of arbitration under S.7B of the Act. By operation of sub-section (2) thereof, the award of the Arbitrator made under subsection (1) shall be conclusive between the parties to the dispute and shall not be questioned in any Court. It is apparent from S.7B of the Act that if any dispute arises between a subscriber and the telegraph authority in regard to payment of telephone bills that shall be referred to an Arbitrator to be appointed by the Central Government. This being the statutory provision governing the field, issue No. (i) is to be considered in the light of the said provision. 8. As it appears vide Annexure-1 dated 17-9-1999, the Assistant Director General (TR) appointed Mr. B. Mallik, the then Director (RTTC), Bhubaneswar as an Arbitrator. The order was passed for and on behalf of the President of India. 9. Mr. P.R. Barik, learned counsel for opposite party Nos. 2 to 4 strenuously urged that in view of the power delegated by the President of India in favour of Asst. Director General (TR), the Arbitrator having being appointed pursuant to Annexure-1, dated 17-9-1999, the requirement of the provisions contained under S.7B of the Act has been complied with. There is no infirmity in appointing Mr. B. Mallik, the then Director (RTTC), Bhubaneswar as Arbitrator pursuant to Annexure-1 and such appointment can be construed as an appointment by the Central Government as required under law. Such argument has been duly controverted by Mr. S.K. Dash, learned counsel for the petitioner who stated that even if power has been delegated by the President of India in favour of the Asst. Director General (TR) to appoint the Arbitrator, the same is not in consonance with the provisions contained under S.7B of the Act, rather, the executive function of President of India has been delegated in favour of the Asst. Director General (TR), which is not the requirement of law under S.7B of the Act.
Director General (TR) to appoint the Arbitrator, the same is not in consonance with the provisions contained under S.7B of the Act, rather, the executive function of President of India has been delegated in favour of the Asst. Director General (TR), which is not the requirement of law under S.7B of the Act. It is further urged that the provision contained under S.7B of the Act is very clear, thereby if the statute prescribes a thing to be done in a particular manner, the same has to be adhered to in the same manner or not at all. The origin of the Rule is traceable to the decision in Taylor v. Tailor, (1875) LR I Ch D 426, which was subsequently followed by Lord Roche in Nazir Ahmad v. King Emperor, AIR 1936 (2) PC 253. But the said principle has been well recognised and holds the field till today in Babu Verghese v. Bar Council of Kerala, (1999) 3 SCC 422 : AIR 1999 SC 1281 and Zuari Cement Limited v. Regional Director, Employees’ State Insurance Corporation, Hyderabad and others, (2015) 7 SCC 690 : AIR 2015 SC 2764 and the said principle has been referred to by this Court in Manguli Behera v. State of Odisha and others, W.P. (C) No. 21999 of 2014 disposed of on 10-3-2016. 10. In view of the aforesaid law laid down by the Apex Court as well as this Court, appointment of the Arbitrator having not been done in consonance with the provisions contained under S.7B of the Act, meaning thereby, it is the Central Government alone can appoint Arbitrator, the same having not been done in consonance with the said provisions the award so passed in Annexure-5 is without jurisdiction and, therefore, cannot sustain in the eye of law. 11. Similar question came up for consideration in M/s. Fly Wings Travels (P) Ltd. ( AIR 1995 Del 71 ) (supra) wherein, the Delhi High Court having come to the conclusion that the Arbitrator having not been appointed in consonance with the provisions contained under S.7B of the Act, set aside the award passed by the said incompetent Arbitrator. In the present case the Arbitrator has not been appointed by the Central Government as required under S.7B of the Act. In view of the discussions made above the issue No. (i) is answered accordingly. 12.
In the present case the Arbitrator has not been appointed by the Central Government as required under S.7B of the Act. In view of the discussions made above the issue No. (i) is answered accordingly. 12. Coming to the question in issue No. (ii), on perusal of the award indicates that no reason has been assigned, rather, the Arbitrator who is obliged under law to pass a reasoned award has resolved the dispute without assigning any reason. It is well settled law that in public law remedy when the order visits with civil consequences, natural justice required recording the reasons as they ;ire bridge between the order and its maker to indicate how his mind was applied to the facts presented and the decision reached. 13. In M.L. Jaggi ( AIR 1996 SC 2476 ) (supra) referring to Raipur Development Authority v. M/s. Chokamal Contractors, AIR 1990 SC 1426 , the Apex Court held as follows: "But arbitral awards in dispute to which the State and its instrumentalities are parties affect public interest and the matter of the manner in which Government and its instrumentalities allow their interest to be affected by such arbitral adjudications involve larger questions of policy and public interest. Government and its instrumentalities cannot simply allow large financial interests of the States to be prejudicially affected by non-re-viewable - except in the limited way allowed by the statute - non-speaking arbitral awards. Indeed, this branch of the system of dispute resolution has, of late, acquired a certain degree of notoriety by the manner in which in many cases the financial interests of Government have come to suffer by awards which have raised eyebrows by doubts as to their rectitude and propriety. It will not be justifiable for Governments or their instrumentalities to enter into arbitration agreements which do not expressly stipulate the rendering of reasoned and speaking awards. Governments and their instrumentalities should, as a matter of policy and public interest - if not as a compulsion of law - ensure that wherever they enter into agreements for resolution of disputes by resort to private arbitrations, the requirement of speaking awards is expressly stipulated and ensured. It is for Governments and their instrumentalities to ensure in future this requirement as a matter of policy in the larger public interest.
It is for Governments and their instrumentalities to ensure in future this requirement as a matter of policy in the larger public interest. Any lapse in that behalf might lend itself to and perhaps justify, the legitimate criticism that Government failed to provide against possible prejudice to public interest. In regard to the arbitration of disputes concerning the claim against the Government, this Court has emphasised the need for recording reasons in the awards touching the public exchequer. In other words, when the public law element is involved, in a public law remedy, public interest demands that reasons should be given even in the award." 14. In view of the aforesaid laid down by the Apex Court, reasons are required to be recorded when it affects the public interest. It is seen that under S.7B, the award is conclusive but when the citizen complains that he was not correctly put to bill for the calls he had made and disputed the demand for payment, the statutory remedy opened to him is one provided under S.7B of the Act. By necessary implication, when the arbitrator decides the dispute under S.7B, he is enjoined to give reasons in support of his decision since it is final and cannot be questioned in a Court of law. However, the only remedy available to the aggrieved person against the award is judicial review under Art. 226 of the Constitution. In paragraph 8 of the decision in M.L. Jaggi ( AIR 1996 SC 2476 ) (supra) the Apex Court held as follows:- "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 conclusion 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 High Court, though does not act in exercising judicial review as a Court of appeal but within narrow limits of judicial review it would consider the correctness and legality of the award." In view of the aforesaid analysis, since the award does not contained any reasons, the same cannot sustain in the eye of law. Issue No. (ii) is answered accordingly. 15.
Issue No. (ii) is answered accordingly. 15. In the light of what has been discussed above, the appointment of Arbitrator, having been made, in derogation of the provisions contained under S.7B of the Act and such Arbitrator having passed the award in Annexure-5 without assigning any reasons, the same cannot sustain. Accordingly, the impugned award passed by the Arbitrator in Annexure-5 is set aside and the matter is remitted back to the Central Government to adjudicate the dispute in consonance with S.7B of the Act. 16. The writ application is accordingly allowed but, in the circumstances, with no order as to costs. Petition allowed.