w w w . L a w y e r S e r v i c e s . i n



National D Eco Rati Jug Co v/s Union of India


Company & Directors' Information:- ECO INDIA PRIVATE LIMITED [Active] CIN = U51505HR2015FTC057017

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- D. N. ECO PRIVATE LIMITED [Active] CIN = U37200MH2019PTC335147

    Appeal No. ---------

    Decided On, 03 August 1990

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE A.M. BHATTACHARJEE

    For the Appearing Parties: A.K. Sirkar, Arati Ghosh, Santanu Mukherjee, Subir Hazra, Tapas Hazra, Advocates.



Judgment Text

A.M. BHATTACHARJEE, J.


(1) THE common run of the cases filed in this jurisdiction against the Telegraph authority, which are almost inundating dockets of this court, are typical.- The petitioners come with the usual complaint that the billing by the Telegraph Authority in respect of the telephones has been wrong and excessive and try to fortify their contention by pointing out that the bills for the periods immediately preceding were at much lower scale. Bills for lesser amounts for the preceding cycles can not, by themselves, lead to the inference that the Bills for higher amounts for the succeeding cycles are wrong or excessive. The respondent Telegraph Authority appears and asserts that the Bills have been correctly made and we then, almost as a matter of course, dispose of the matter by directing the disputes to be referred to arbitration under the provisions of Section 7b of the telegraph Act, 18 85, with a further direction to the Central government, usually a party to the petitions before us, to appoint an Arbitrator in terms of that Section.


(2) ASSERTION by the subscriber that the telephone bill is excessive and the amount billed is much more than what it ought to have been and a counter-assertion by the Telephone be Authority that the Bill is correct, would, by. and large, involve dispuited questions of fact and Writ Court is generally not the forum. for the adjudication of such disputes and, therefore, until the insertion of Section 7b in the Telegraph Act of 1885 in 1957, the dispute was, to be resolved by ordinary suit. But is there anything in Section 7b which would justify invocation of the Writ jurisdiction and the issuance of Writs? Set us have a look at the Section, reading as hereunder : -


"7b - Arbitration of disputes - (1) Except as otherwise expressly provided in this act, if any dispute concerning any telegraph line, cable chamber, tower, appliance or apparatus, arises between. the telegraph authority and the person for whose benefit the line, cable chamber, tower, 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 as - arbitrator appointed by the Central Government either specially for the determination of that dispute or generally for the determination of dispute 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. "


(3) LEARNED Counsel for the Petitioner, has urged that the provisions of Section 7b can not apply to any dispute as to excess billing and for this the learned Counsel has mainly relied on the observations in a recent Special Bench decision of the Gauhati High Court in Santoah Singh vs divisional' Engineer Telephones (AIR 1990 Gauhati 47). It is true that the Special Bench in that case has cleanly ruled "that the dispute regarding- excess billing does not fail within the ambit of section 7b" and that "section 7b has no application to a case of excess billing"; But, with respect, I have not been able to fursuade myself. to agree with these observations and I have no doubt that dispute relating to correctness of the amount billed for the telephone, for the rental or for the calls alleged to have been made, is a dispute concerning the telephone line, appliance or apparatus. The expression concerning means "about". If there could have been* no occasion for any telephone Bill but for the telephone line, the dispute relating to the Bill would obviously be a dispute about or relating to or concerning the telephone line. There are good number or authorities for the view I take and reference, among others, may be made to two single-Judge decisions of the Orissa High Court in Nityananda Sahu vs. Post-Master General (AIR 1977- Orissa 48) and in Makhani devi v. Union of India (AIR 1981 Orissa 11), both rendered by the same learned Judge and also to a recent Division bench decision of that High Court in Orissa Vegetable Oil complex vs. Union of India (AIR 1990 Orissa 51), where the earlier 'orissa decisions have been relied. In Makhani cevi, (supra), R. N. Misra, J. , (as his Lordship then was), has held, relying on his own earlier decision in Nityananda sahu (supra), that the telephone set provided to the subscriber is an apparatus within the meaning of Section 7b (1)and since the disputed Bills relate to the user of that apparatus, the dispute would obviously be covered by Section 7b (1).


(4) IF dispute relating to the amount of Bill concerning or relating to a telephone is, and in my view it is, a dispute within the meaning of Section 7b, and such a dispute is raised by the subscriber, it is difficult to understand as to how any action to the prejudice of the subscriber can be taken by the Telegraph Authority for non-payment of such Bill, without having that dispute resolved by arbitration under and in accordance with Section 7b. I should 'like to have no doubt that once a dispute is raised within the meaning of Section. 7b, an arbitration there under is a must before the authority can proceed further to the prejudice of the subscriber. There is nothing to prevent the subscriber from asking the Authority to take steps for appointment of and reference to the Arbitrator and in fact the subscriber should do so, if he finds the Authority not to move in the matter with reasonable expedition. But since the Authority would not be able to take further action for the non-payment of the Bill until the dispute is arbitrated, and thus the ball is more in its court than that of the- subscriber, it would be for the Authority, both in departmental and also in public interest, to take the move as expeditiously as possible. But if the Telegraph authority does not do so, is the Writ Court the only forum that can be resorted to by the subscriber for the necessary relief ? Can not, and should not, the subsrciber move the civil Court under Section 20 of the Arbitration Act. , 1940 ?


(5) UNDER Section 47 of the arbitration act, the provisions thereof would apply to all arbitrations, private or statutory, subject to the provisions of Section 46. And under section 46, except the provisions of Sections 6 (1), 7, 12, 36 and 37, all the other provisions of the Arbitration Act shall apply to arbitrations under any enactment also "as if the arbitration were pursuant to an arbitration agreement" and as if the relevant statutory provision relating to arbitration under that enactment "were an arbitration agreement", save in so far the Arbitration Act, 1940 "is inconsistent" with the concerned enactment or the rule made the under. The position, as a result of the combined operation of Section 46 and 47 of the Arbitration Act, therefore, is that Section 20 of the Arbitration Act shall apply to an arbitration under Section 7b of the Telegraph Act, 1885, unless there is any thing in Section 20 of the Arbitration act which "is- inconsistent" with Section 7b or any other provision of the Telegraph Act. I have found none.


(6) MR. Mukharjee for the petitioner has, however, urged that the provisions of sub-section (2) of Section 7b, providing that "that award of the arbitrator" shall be conclusive between the parties to the disputes and. shall not be questioned in any Court", would go to indicate that the provisions of the Arbitration Act providing for. modification, remission, setting aside and the like of the award by the court are inconsistent with the provisions of Section 7b (2)investing award with finality and also non- justiciability. An award is also made "final and bindina" on the parties under para 7 of the First Schedule of the Arbitration Act and such finality and binding nature should obviously mean that parties can no longer question the same. But these provisions do not make the award, even though "final and binding", immune from the interference by the Court under Sections 15, 16 or 30. I need not, however, pursue this aspect as I am not concerned with the question as to whether Section 7b would outweigh the provisions of the Arbitration Act providing for interference by the Court with the award. But even assuming, though not deciding, that to be so, there is nothing in- Section 20 of the Arbitration Act, providing for filing of the arbitration agreement in Court for order of reference to the arbitrator, which is in any way inconsistent with Section 7b of the Telegraph Act, of its sub-section (2) in particular, which purports to vest the award with finality and non- justiciability. I, therefore, do not find any reason to hold that Section 20 of the Arbitration Act is not applicable or available to an arbitration under Section ib of the Telegraph Act.


(7) MR. Mukherjee has, however, urged that under Section 7b, it is not any of the parties to the dispute like the subscriber or the Telegraph Authority, but only a third party, namely, the Central Government, who is to appoint the arbitrator. And since Section 20 (A) of the Arbitration Act clearly provides for an order of reference "to the arbitrator appointed by the parties" or where the parties cannot agree, "to an arbitrator appointed by the Court. , it is sufficiently inconsistent with Section 7b of the Telegraph Act to be overthrown by the latter, I have considered the contention with all the care 1 can afford to, but have rejected the same for reasons as hereunder. Let me reproduce the relevant portions of the two Sections before I state the reasons.


"telegraph Act,1885. 7b. (1). . . . . . . . any dispute. . . . . . . . between the telegraph authority and the person for whose benefit the line. . . . . . . . . , is or has been provided,. . . . . . . . . . . shall, be determined by arbitration and shall. . . . . . . . . . . . . . be referred to an arbitrator appointed by the Central Government. . . . . . . . . . . "


Arbitration, Act, 1940. (4). . . . . . . . . . . the, Court. . . . . . . . . sha 11 make- an order of reference to the arbitrator anointed by the parties. . . . . or, where the para ties cannot agree. . . . . . . . . . to arbitrator appointed by the Court it is the section 20 (8) the expression "arbitr appointed by the parties, what in agreement or so. But if the parties cifically agreed party iintment by such agreed third party, would in law amount to appointment by the parties. Quic Quid Par Alium Facit per Se. If the parties have agreed to delegate and have in fact delegated their power to a third party, the exercise of the power by the delegate would be an exercise of power by the parties themselves.


(8) THE three- Judge Bench decision of the Supreme Court in Dhanrajmal Gobindram vs. Shantj i Kalidas (AIR 1961 SC 1285)appears to be a clear and categorical authority for this proposition, where it has been ruled as hereunder : -


"this is a statutory arbitration governed by its own rules, and that the powers and the duties of the Court in sub-section (4) of Section) 20 are of two distinct kinds. The first is the judicial function to consider whether the arbitration agreement should be filed in court or not. That may involve dealaing with objections to the existence and validity of the agreement itself. Once that is done and the Court has decided that the agreement must be that,. the first part of its powers and duties is over. . . . . . . . . . . . Then follows a ministerial act of reference to the arbitrator or arbitrators appointed by the parties. . . . . . . . . . . . In the present case the parties by their agreement have placed the power of selecting an arbitrator or arbitrators (in which we also include the umpire) in the hands of the Chairman of the Board Directors of the East indian Cotton Association Ltd and the Court can certainly perform the ministerial act of sending the agreement to him to be dealt with by him. . . . . . . . , In our opinion, there is no impediment to action being taken under Section 20 (4) of the Arbitration Act".


Mr. Mukherjee has, however, drawn my attention to a much later two-Judge Bench decision of the Supreme Court in Union of India vs. Prafulla Kumar Sanyal (AIR 1979 SC 1457) and has sought to rely thereon as an authority for a contrary view. The two-Judge Bench in Prafulla_kumar (supra) could not obviously out-weigh the view of the three-Judge Bench in Dhanrajmal Govindram (supra). Hut a careful reading of the decision in Prafulla Kumar (supra) would demonstrate that the two-Judge Bench, which has noted the earlier three-Judge Bench decision in Dhanrajmal Govindram. The two-Judge bene'' in Prafulla Kumar (supra), has accepted, as it must, the view in, Dhanrajmal Govindram (supra) to the effect that the Court can, even in cases where parties have agreed to the appointment of arbitrators by _third parties, proceed under Section 2 0 and send the agreement to such third party for appointment of arbitrator and all that. But what has been sought to be emphasised in Prafu11a Kumar (supra) is that since Section 20 (4) uses the expression "appointed", the Court is not bound to,, but not that it cannot, make an order of reference to an arbitrator, who is to be but has not yet been, appointed by the appointer. The view of the three-Judge Bench in Dhanrajmal Govindram (supra), that the court can proceed to invoke its powers and jurisdiction under section 20, even when the arbitrator is to be appointed by a third party and even where such appointment has not been, but is yet to be, made, must, therefore, be taken to be settled law.


(9) A Division Bench of the Madras High Court in Ama__corporation vs. Food Corporation of India (AIR 1981 Madras 121)has, on a consideration of the two decisions of the Supreme court in Dhanrajmal Govindram (supra) and in prafulla Kumar sanyal (supra), also ruled that even where the parties by their agreement have placed the power of appointing an arbitrator in the hands of another person, the provisions of section 20 can be effectively invoked and applied. To the same effect is a single-Judge decisison of the Delhi. High court in Alkarma vs. Delhi Development Authority (AIR 1981 delhi 230) where, relying on the Supreme Court decision in dhanrajmal Govindram (supra) and other decisions of the Delhi and some other High Courts, including a Division Bench decision of the Madhya Pradesh) High Court in Pargania and Agnihotri vs. Union of India (1977 Madhya Pradesh law "journal 252), it has been held that the words "the arbitrator appoints by the parties" in Section 20 (4) would include an arbitrator appointed or to be appointed by some other party as agreed to by the parties in the agreement.


(10) RELIANCE placed by Mr. Mukherjee on an earlier Single-Judge decision of the Delhi High Court in Basakha Singh vs. Indian Drug and Pharmaceutical (AIR 1979 Delhi 220) appears to be entirely misplaced. There the agreement provided affirmatively that. . . the arbitrator was to be appointed by a persona designata and it also provided negatively that "if for any reason that is not possible, the matter is not to be referred to arbitration at all". And the persona desidgnata having failed or neglected to appoint an arbitrator, it. was held that the Court can not proceed to appoint, an arbitrator on its own under Section 20)4). This is not the case before me. But that apart, it should be noted that two later single-Judge decisions of the Delhi High Court, in Alkarma vs. Delhi dejvelogmejit Authority (supra). and in Rajindra Electric Works vs _delhi State Industrial Development Corporation [air 1981 delhi- 225), have explained the decision in Basakha Singh (supra) and the other decisions purported to have been relied on therein and it has been ruled that though the Court in such a case may not appoint an arbitrator on its own, the court can nevertheless, in exercise of its power under Section 20, command the persona designata to make the appointment. As I have already indicated, this is not the question which arises for my consideration in this case; but I would, nevertheless, and that if it were necessary for me to decide the question, I would have respectfully agreed with the two later decisions in Alkarma (supra) and in Rajindra Electric Works {supra).


(11) THE position in law, even before a specific bar was introduced in Article 226 by the Constitution (Forty-Second amendment) Act, 1976 on the power of the High Courts to exercise this judrisdiction where an alternative remedy was available (except for the enforcement of the Fundamental Rights)and also after this express bar was removed by the Constitution (Forty-Fourth Amendment Act, 1987, is the same and the principles enunicated by a unanimous Constitution Bench of the Supreme Court in Than sing Nathmal (AIR 1964 SC 1419 at 1423), not having been "dissented or departed from by or in any co-equal or larger Bench, must be taken to be the settled law. And that law is that, notwithstanding the wide arch of its enormous jurisdiction and the immense range of its amplitude and plentitude and magnitude, "it is not exercised merely because it is lawful to do so", "is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute" and "ordinarily the Court will not entertain a petition for a writ under article 2 26, where the petitioner has an alternative remedy. Which without being unduly onerous, provides an equally effacious remedy". In fact, even as early as in 1957 in Union of India vs. T. R. Verna (AIR 1957 So 882), an earlier Constitution Bench also ruled that the existence of remedy by way of suit is also to be taken into consideration in granting or refusing relief under Article 226.


(12) I would venture to think that these clear and categorical pronouncements of. our apex. Court shoul,d lead us to hold that refusal of writ, where an alternative effacacious remedy stares at the face, must be the rule and granting thereof must be an exception to be restored to in exceptional cases. Alternative, effacacious and not unduly onerous alternative remedy must be reckoned as a bar to the invocation of writ jurisdiction, though it cannot be held to be an absolute and unqualified one, for to hold' so would be to amend article 226, as was sought to be done by the Constitution (Forty-Second Amendment) Act, 1976.


(13) NOW that I have held that the provisions of Article 20 of the Arbitration Act are available for an effective arbitral reference for a dispute under Section 7b (1) of the "telegraph Act, I do not see any reason as to why this Court shall not decline to entertain a Writ Petition for reference to arbitration under the provisions of Section 7b and the petitioner shall not ho required to resort to Section 20 of the Arbitration Act. I do not see what necessary relief may not be available under Section 20 Arbitration Act which would be available under the Writ Jurisdiction.


(14) LEARNED Counsel for the parties have, however, endeavoured to urge that if resort is made to be provisions of Section 20, Arbitration Act, 1940, an interim relief pending that proceeding and pending the arbitration that may follow, may not be available. I am afraid that this contention must be rejected in view of the provisions of Section 41 (a) of the Arbitration Act making the provisions of the Code of civil Procedure applicable to all proceedings before the court under the Arbitration Act and, in particular, the provisions of Section 4kb), where under the powers of the Court in respect of any of the matters set out in the Second Schedule to the Act have been clearly spent out and the Entry No. 4 in that Schedule is "interim injunction or the appointment of receivers. "


(15) THESE provisions clearly confer on the Court all the powers that Civil Court may exercise in respect of the matters specified in the Second Schedule including "interim injunctions". They are not, in terms, limited to pending arbitration proceeding and may be exercised although the arbitration proceeding lias not yet commenced and the Court can exercise such powers as soon as an application is moved and registered under Section 20, even though the notice of the application might not have been served on or reached the other party. Reference in this connection may be made to a decision of this Court in Court Lal vs. Butar (5 2 Calcutta Weekly totes 4 5) and to a decision of the Patna High Court in Nagar Chand vs. Surendar (AIR 1946 Patna 70).


(16) IN all these three Writ Petitions, the cases made by the respective Petitioners are that the Bills presented to them are excessive and arbitrary and while in the two Petitions being C. 0. 4955 (W) of 1990 and CO. 7902 (W) of 1990 , the Petitioners have prayed for orders directing reference to arbitration under the provisions of Section 7b, Telegraph act, in the other Petition being CO. 790 1 (W) of 1990, the petitioners has prayed for Writs/orders directing the Respondents to withdraw and/or cancel the Bills. I do not think that this Court is the proper forum for the determination of the dispute as to the correctness of the Bills presented and therefore the writs/orders prayed for directing withdrawal or cancellation of the disputed Bills can not issue. The learned Counsel for the Respondents has drawn my attention to a Division Bench decision of this Court in APOD Mo. 1040 of 1987 (Plasto Toys Industries vs. General Manager, Calcutta telephones, decided on 11th March, 1987), where G. N. Ray, j. , speaking for the Bench, has also ruled to the* same effect. The only relief that can be 'granted in these cases is a writ/ order directing the Respondents to take steps for reference of the disputes to arbitration under Section 7b and such relief is to be granted in CO. 7901 (W) of 1990 also, even though not specifically prayed for. Absence of any specific prayer for a particular relief can never stand in the way of its being granted if the materials on record warrant such grant.


(17) AS I have made it clear at the outset, not that a Writ court cannot issue a proper Writ or order directing the Respondents to initiate arbitral reference under Section 7b, telegraph Act. But all that I have endeavoured to point out is that once a dispute relating to the amount payable by the subscriber or any other dispute within the meaning of section 7b is raised, determination of such dispute by reference to arbitration under that Section is a must. And if the Telegraph Authority refuses or neglects to take the requisite steps for initiation of such reference, the subscriber has a clear remedy under Section 20 of the Arbitration act and the Court, where the subscriber initiates the proceeding under Section 20, can direct the Central Government to appoint an Arbitrator, unless such a one is already appointed generally for the purpose

Please Login To View The Full Judgment!

, and refer the dispute to such arbitrator. The Court may also, if it so thinks fit, issue interim orders under Section 41 of the Arbitration Act, on such terms as to payment or otherwise, restraining the Telegraph Authority from disconnection the service pending arbitration or even directing restoration, if disconnecting has already been effected before or pending the arbitration. With these provisions staring at the face providing for such adequate reliefs that a subscriber can have in respect of a dispute covered by the provisions of Section 7b of the telegraph Act, I have not been able to appreciate our entertaining' petitions in this extra-ordinary jurisdiction for such ordinary matters. If we are to, as we can not but, govern ourselves by the principles emunicated by the Sufreme Court in Thansingh Nathmal (supra),, extracted hereinbefore, we ought to reserve this jurisdiction for such matters only, where no adequate remedy can bet available in any other forum. (18) BUT as already stated, since it is not that a writ can never lie and we cannot entertain these petitions, and as these petitions have already been entertained and the parties have put in affidavits and the matters have been finally heard at considerable length, I do not propose to reject these pettions solely on the ground of existence of alternative remedies. Since I have already entertained these petitions, and have heard the parties, which undoubtedly i can, I direct that the Central Government, a party respondent to these petitions, shall appoint an Arbitrator for the determination of the disputes raised in these petitions within One month from the date of this order and the disputes shall stand referred to such arbitrator, who shall enter on the reference forthwith and shall submit his award within three months from the date of his entering on the reference. And I direct further that pending such arbitration and publication of the award, the respondents shall not take any steps to disconnect the telephone line on the ground of nonpayment of the Bills in dispute, provided half of the amount claimed in those Bills is deposited, it not already deposited, within a month from this date with the Telegraph Authority. Such deposit by the subscriber and receipt by the Telegraph authority shall be strictly without any prejudice to the rights and contentions of the parties relating to the dispute. And I would like to make it clear that the order passed by me in these three cases shall not be treated as any precedent. No costs. Petitions disposed of.
O R