Allowed

Dr.Thomas Varughese v. M/S.Lakeshore Hospital Centre Ltd.

Kerala HC29 Oct 2013AR/25/2013

Case brief

AI extract

What is this about?

In an arbitration request under the Arbitration and Conciliation Act, 1996, the Kerala High Court held that a dispute over the interpretation of a service appointment letter, specifically regarding notice pay after termination, constitutes an arbitrable matter. The Court overruled the respondent's objection regarding the existence of a dispute and appointed the proposed arbitrator.

What did the court decide?

Arbitration request allowed; Sri.C.Khalid, Former District Judge, appointed as sole Arbitrator.

Dr.Thomas Varughese Vs M/S.Lakeshore Hospital Centre Ltd. — Arbitration | Kerala HC (2013)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN

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TUESDAY, THE 29TH DAY OF OCTOBER 2013/7TH KARTHIKA, 1935

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AR.No. 25 of 2013 ()

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PETITIONER:

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DR.THOMAS VARUGHESE KAITHAPATHALIL, DHANYA ROAD, INTUC JUNCTION NETTOOR, KOCHI - 682 040.

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BY ADV. SRI.P.NANDAKUMAR

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RESPONDENT:

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M/S.LAKESHORE HOSPITAL CENTRE LTD. NH-47, BY-PASS, NETTOOR KOCHI -682040 REPRESENTED BY ITS MANAGING DIRECTOR & CEO DR.PHILIP AUGUSTINE MD DM.

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BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR BY ADV. SRI.P.GOPINATH BY ADV. SRI.P.BENNY THOMAS BY ADV. SRI.K.JOHN MATHAI

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THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON 29-102013, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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A.R.No. 25 of 2013

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APPENDIX

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PETITIONER(S)' ANNEXURES:

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ANNEXURE A1TRUE COPY OF NOTICE DTD 7.2.2013 ISSUED BY THE RESPONDENT ANNEXURE A2TRUE COPY OF NOTICE DTD 18.3.2013 ANNEXURE A3TRUE COPY OF THE REPLY NOTICE DTD 10.4.2013 ANNEXURE A4TRUE COPY OF APPOINTMENT LETTER DTD 4.11.2002 ANNEXURE A5TRUE COPY OF NOTICE DTD 3.4.2013

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RESPONDENT(S)' ANNEXURES:

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ANNEXURE R1(a)TRUE COPY OF THE LETTER DTD 19.8.2011 ISSUED BY DR.CHITRA THARA K. TO THE RESPONDENT ANNEXURE R1(b)TRUE COPY OF LETTER DTD 18.10.2011 ISSUED BY THE SUB INSPECTOR OF POLICE, THRIPPUNITHURA, HILL PALACE STATION TO THE RESPONDENT ANNEXURE R1(c)TRUE COPY OF REPLY DTD 20.10.2011 SENT BY THE RESPONDENT TO THE SUB INSPECTOR OF POLICE, THRIPPUNITHURA, HILL PALACE STATION ANNEXURE R1(d)TRUE COPY OF THE ENQUIRY REPORT DTD 18.12.2011 ALONG WITH THE CALENDAR OF EVIDENCE BOTH ORAL AND DOCUMENTARY ANNEXURE R1(e)TRUE COPY OF THE NOTICE DTD 29.2.2012 ISSUED BY THE RESPONDENT TO THE APPLICANT ANNEXURE R1(f)TRUE COPY OF THE EXPLANATION DTD 20.3.2012 SUBMITTED BY THE APPLICANT TO THE RESPONDENT ANNEXURE R1(g)TRUE COPY OF THE LETTER OF TERMINATION DTD 7.2.2013 ISSUED BY THE RESPONDENT TO THE PETITIONER.

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/TRUE COPY/ VPS PA TO JUDGE

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P.N.RAVINDRAN , J.

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A.R. No.25 of 2013

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Dated this the 29^th day of October, 2013

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O R D E R

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The petitioner, a Doctor by profession was appointed as Senior Consultant and Head of Surgical Oncology in Lakeshore Hospital & Research Centre Ltd., Nettoor as per Annexure-A4 letter with effect from 1.12.2002. Initially he was paid consolidated professional charges of Rs.60,000/- per mensem. He was entitled to other benefits as well. Later the professional charges were revised to Rs.1,50,000/- per mensem with effect from 1.7.2010. While matters stood thus, the Managing Director of Lakeshore Hospital & Research Centre Ltd., served Annexure-A1 letter dated 7.2.2013 on the petitioner on 28.2.2013 informing him that the Board of Directors have decided to terminate his services. It was stated that though an offer was made to him that he can submit his resignation so that he can be relived from service by 1^st March, 2013, nothing has been heard in the matter from him and therefore, the Managing Director is forced to implement the decision of the Board to terminate his service. The petitioner was also informed that his last date of service in Lakeshore Hospital & Research Centre Ltd., will be 28^th February, 2013.

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A.R.No.25/2013

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Upon receipt of Annexure-A1 letter, the petitioner caused Annexure-A2 notice dated 18.3.2013 to be issued to the Managing Director of Lakeshore Hospital & Research Centre Ltd. calling upon him to pay three months last drawn salary in lieu of notice, arrears of salary for 40 days , 15 days salary for every completed year of service towards gratuity and 15 days salary for every completed year of service towards termination compensation within 15 days from the date of notice failing which the Managing Director was cautioned that the petitioner will be constrained to initiate legal proceedings including arbitration proceedings.

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Upon receipt thereof, the Managing Director caused Annexure-A3 reply dated 10.4.2013 to be issued denying and disputing the petitioner’s claim. The petitioner had in the meanwhile send Annexure-A5 notice dated 3.4.2013 to the Managing Director of Lakeshore Hospital & Research Centre Ltd. calling upon him to refer the dispute between the parties for arbitration within 10 days from the date of receipt of notice. The petitioner had in that notice also named Sri.C.Khalid, Former District Judge as the sole Arbitrator. The instant arbitration request was thereafter filed on 17.6.2013 praying for the appointment of an Arbitrator to resolve the disputes and difference between the petitioner on the one hand and the respondent on the other in terms of the provisions contained in the Arbitration and

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A.R.No.25/2013 3

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Conciliation Act, 1996. The petitioner has averred that there is an arbitrable dispute between the petitioner and the respondent, that there is a valid arbitration agreement between the parties and that his demand to refer the dispute for arbitration was not accepted and therefore he is left with no other remedy except to move this Court seeking the appointment of an Arbitrator.

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The respondent has entered appearance through counsel and filed a counter affidavit dated 4.10.2013. The substance of the averments therein is that pursuant to the receipt of information from the Sub Inspector of Police, Hill Palace Police Station, Thripunithura a fact finding enquiry was conducted into the misuse of confidential records maintained in the hospital and in the enquiry the petitioner was found guilty and a decision was taken by the Board of Directors to terminate his services, that the decision of the Bord of Directors was communicated to the petitioner by the Managing Director on 1.2.2013 and the petitioner being a Senior Consultant, the Managing Director requested him to submit his resignation in order to avoid the unpleasant task of terminating him from service, but the petitioner did not accept it and therefore the letter of termination dated 7.2.2013 was issued to him. The counter affidavit proceeds to state that immediately after termination, the petitioner joined another hospital on 1.3.2013 itself and he is working in the said hospital at present. It

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A.R.No.25/2013

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is also stated that the management did not give him three months notice as the service of the petitioner was terminated on account of the extra ordinary circumstances which culminated in the leakage of confidential medical records maintained in the hospital to an outsider and therefore the petitioner is not entitled to three months professional charges in lieu of notice as claimed by him. The petitioner's claim for other benefits is also denied and disputed in paragraphs 6 and 7 of the counter affidavit. In paragraph 8 it is contended that the dispute between the parties is not covered by the arbitration clause referred to in Annexure-A4 letter of appointment and therefore the arbitration request is liable to be dismissed.

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The petitioner has filed a reply affidavit dated 4.10.2013 contending inter alia that the enquiry was conducted behind his back, that he was not given copy of the enquiry report, that though a reply was sent to Annexure R1(e) show cause notice, it was not finalised and that the letter of termination does not refer to the findings of the enquiry report and is only a termination simplicitor, but going by the averments in the counter affidavit it is evident that termination is by way of punishment. The petitioner has also averred that he does not propose to answer the allegations made by the respondent in the counter affidavit as the same are unnecessary for the purpose of arbitration request and he reserves his right to reply to the same

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A.R.No.25/2013

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before the appropriate forum.

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I heard Sri.P.Nandakumar, learned counsel appearing for the petitioner and Sri.Joson Manavalam, learned counsel appearing for the respondent. The learned counsel appearing for the petitioner contended that on the terms of the letter of appointment (AnnexureA4) the petitioner was entitled to three months notice, that in paragraph 12 thereof it is stipulated that in the event of any dispute or disagreement over the interpretation of any of the terms therein mentioned, the same shall be referred to arbitration, that it is evident from the conduct of the respondent more particularly their stand that the petitioner is not entitled to three months notice or payment in lieu thereof of three months' professional charges, that there is a dispute as regards interpretation of the terms of the letter of appointment and therefore, the dispute between the parties is liable to be referred to arbitration. Per contra, Sri.Joson Manavalan, learned counsel appearing for the respondent contended that paragraph 12 of Annexure-A4 agreement provides for reference only in case of disputes or disagreement over the interpretation of any of the terms mentioned therein to arbitration, that the dispute in the instant case does not relate to the interpretation of any of the terms of Annexure-A4 letter or to the validity or otherwise of the letter terminating the service of the petitioner and therefore there is no arbitrable dispute between the

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A.R.No.25/2013

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parties which can be the subject matter of an arbitration. The learned counsel also placed reliance on the decision of the Apex Court in SBP

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& Co. v. Patel Engineering Ltd. and Another (2005 (8) SCC 618)

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to contend that this Court while considering arbitration request can also go into the question whether an arbitrable dispute exists between the parties.

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I have considered the submissions made at the Bar by the learned counsel on either side. I have also gone through the pleadings and the materials on record. The petitioner was appointed as Senior Consultant and Head of the Department of Oncology by Annexure-A4 letter dated 4.11.02 with effect from 1.12.2002. In paragraph 10 of the said letter it is stipulated that the agreement thereunder is for a minimum period of five years and renewable thereafter by agreement between the parties. It is also stipulated that this agreement is liable to be terminated during the said period by either party giving the other three months notice of the same or payment in lieu thereof of three months' professional charges referred to to clause (1) above. It is not in dispute that the petitioner’s services were terminated by AnnexureA1 letter dated 7.2.2013 which was sent by registered post on 25.2.2013 and was served on him in person on 28.2.2013 and that he was not paid three months' professional charges. By Annexure-A1 letter his services were terminated with effect from 28.2.2013,

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A.R.No.25/2013

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meaning thereby that three months notice was also not given. While the stand taken by the petitioner is that in view of Annexure-A4 letter he was entitled to three months notice pay besides amounts payable under other heads, the stand taken by the respondent is that in view of the circumstances which led to the issuance of Annexure-A1 letter, the petitioner is not entitled to three months notice or three months' professional charges in lieu of notice. The respondent has also denied and disputed the other claims raised by the petitioner in Annexure-A2 notice dated 18.3.2013 and Annexure-A5 letter dated 3.4.2013. The respondent has also raised a contention that the dispute that has thus arisen between the parties does not relate to interpretation of any of the terms of Annexure-A4 letter dated 4.11.2002. It is evident from the pleadings and the materials on record including the counter affidavit filed by the respondent that a dispute has arisen between the parties as regards the interpretation to be placed on paragraph 11 of Annexure-A4 letter. While the stand taken by the petitioner is that his services were terminated by Annexure-A1 letter which is a letter of termination simplicitor, the stand taken by the Manager is that it was the result of an enquiry into his conduct. A dispute has thus arisen between the petitioner and the respondent. As the dispute relates to the question whether the petitioner is entitled to three months' professional charges in lieu of notice or three months notice, it cannot

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A.R.No.25/2013

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be said that no arbitrable dispute have arisen between the parties. I accordingly overrule the objection raised by the respondent to the maintainability of the arbitration request. The respondent has besides objecting to the arbitration request not objected to the appointment of Sri.C.Khalid, former District Judge as intimated by the petitioner. In Annexure-A5 letter dated 3.4.2013 and in the counter affidavit also no objection has been taken to the appointment of Sr.C.Khalid as the Arbitrator.

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I accordingly allow the arbitration request and appoint Sri.C.Khalid, Former District Judge, Asiana, Hamza Kunhe Lane, S.R.M.Road, Ernakulam, Kochi-682018, as the Arbitrator to resolve the dispute between the petitioner on the one hand and respondent on the other. The Arbitrator shall enter upon reference and dispose of the case expeditiously.

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P.N.RAVINDRAN,

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vps

Dr.Thomas Varughese v. M/S.Lakeshore Hospital Centre Ltd.

Case brief

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Dr.Thomas Varughese v. M/S.Lakeshore Hospital Centre Ltd.

Case brief

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