Dismissed

Vst Industries Ltd. v. Divl.Eng.Nampally and 3

Telangana HC1 Sept 2008WA/1041/1999

Case brief

AI extract

What is this about?

In this writ appeal, the High Court upheld the single Judge's dismissal of a petition challenging an arbitration award. The appellant contended the departmental arbitrator was biased and his appointment violated earlier directions. The Court rejected both contentions, finding the appellant failed to prove bias and the appointment was statutory. The appeal was dismissed with six weeks to pay pendin

What the court decided

AI extract

Vst Industries Ltd. Vs Divl.Eng.Nampally and 3 — Arbitration | Telangana HC (2008)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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TUESDAY, THE SECOND DAY OF SEPTEMBER TWO THOUSAND AND EIGHT

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PRESENT

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THE HON'BLE MR JUSTICE V.ESWARAIAH &

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THE HON'BLE MR JUSTICE G.V.SEETHAPATHY

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WRIT APPEAL No.1041 of 1999

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(Writ Appeal under Clause 15 of the Letters Patent against the Order dated in NO : OF on the file of the High Court.)

Between:

..... APPELLANT

AND

.....RESPONDENT

Counsel for the Appellant:MR.V.PADMANABHAN Counsel for the Respondent No.: MR.M.RATNA REDDY The Court made the following:

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Form-NIC-OGS/WA { }

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THE HON'BLE MR JUSTICE V.ESWARAIAH & THE HON'BLE MR JUSTICE G.V.SEETHAPATHY

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WRIT APPEAL No.1041 of 1999

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JUDGMENT: (per Hon’ble Sri Justice V.Eswaraiah)

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The unsuccessful writ petitioner in W.P.14035 of 1999 filed this writ appeal aggrieved by the order of the learned single Judge dated 14.07.1999 in dismissing the said writ petition

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The writ petition was filed questioning the arbitration award passed by the 1^st respondent herein dated 23.06.1999.

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The brief facts of the case are that the appellant is the subscriber of two telephone lines bearing Nos.238709 and 215449, which were installed, at the residence of the Senior Vice-President of the appellant company. The appellant earlier filed W.P.34480 of 1998 questioning the orders passed by the Chief Accounts Officer TR (Central), Department of Telecom, Hyderabad District in letter No.AOTRII(Central)/238709/215449 dated 04.12.1998, whereunder the appellant company was called upon to settle the dues payable on the aforesaid two telephone numbers, amounting to about Rs.27 lakhs for the period from 15.04.1998 to 15.10.1998, before15.12.1998, failing which the it was stated that the department will disconnect all the telephones working for the appellant company. The said writ petition i.e. W.P.34480 of 1998 was disposed of on 15.12.1998, holding that the Indian Telegraphs Act makes a provision for arbitration of the dispute of this nature under Sec.17-B of the Post & Telegraphs Act, 1989 by an arbitrator appointed by the Central Government, and therefore, the said dispute could be adjudicated more effectively by way of arbitration than embarking upon enquiry by this Court under Article-226 of the Constitution of India, and accordingly, the appellant was directed to deposit 1/3^rd of the demanded amount within two weeks, and make an application before the General Manager, Hyderabad Telephones to refer the matter to arbitration, and on receiving such application, the General Manager is directed to address the Central Government for appointment of an arbitrator, preferably an officer not belonging to the department, and on

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receiving the requisition, the Central Government shall appoint an arbitrator, who shall adjudicate the dispute, as expeditiously as possible.

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It is stated that pursuant to the said order, the appellant deposited 1/3^rd of the demanded amount and made an application and on receiving such application, the General Manager, Hyderabad Telephones addressed the Central Government for appointment of an arbitrator and the Central Government, accordingly, appointed the arbitrator i.e. the 1^st respondent herein. The 1^st respondent/arbitrator issued a notice dated 28.04.1999, directing the appellant and the Chief General Manager, Telecom, A.P.Circle, Hyderabad to attend the preliminary hearing along with the written statement and copies of all relevant documents to resolve the dispute. The parties were given liberty to engage their respective counsels. Thereafter, another notice dated 10.05.1999 was issued giving reasonable opportunity to appear for enquiry on 20.05.1999 and the same was adjourned at the request of the counsel for the appellant to 21.06.1999.

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It is stated that the appellant filed an application dated 18.06.1999 on 21.06.1999 under Sec.12(3) of the Arbitration and Conciliation Act, 1996, challenging the appointment of the departmental arbitrator, stating that the appointment of departmental arbitrator is not in conformity with the orders passed by this Court in W.P.34480 of 1998 dated 15.12.1998 as he apprehends that the departmental arbitrator will have biased in favour of the respondents, and accordingly, the arbitrator is called upon to withdraw from office as arbitrator. But, however, the arbitrator passed the award on 23.06.1999.

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It is stated that questioning the said arbitration award dated 23.06.1999, the appellant filed W.P.14035 of

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1999 on the grounds that the application moved by the appellant expressing his lack of faith in the arbitrator was not decided, therefore, the award is vitiated, and that the Court while disposing of the earlier writ petition had directed that arbitrator should be preferably a man outside the department, and since the departmental man had been appointed as arbitrator, therefore, the award is vitiated. Both the contentions have been negatived by the learned single Judge of this Court and dismissed the said writ petition. Aggrieved by the same, the present writ appeal has been filed.

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The learned counsel appearing for the appellant canvassed the self-same two grounds before this Court contending that the arbitrator was biased in favour of respondents and that the appointment of the departmental arbitrator is contrary to the directions of this Court issued in the earlier writ petition i.e. W.P.34480 of 1998, dated 15.12.1998.

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We have considered the rival contentions.

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We are of the opinion that the learned single Judge has correctly appreciated the case of the appellant and negatived the aforesaid two contentions.

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With regard to the fair and reasonable opportunity is concerned, the perusal of the arbitration award goes to show that sufficient and reasonable opportunity has been given to the appellant, and in fact, at the instance of the counsel appearing for the appellant alone, the matter has been adjourned, but the appellant could not place any material disputing the particulars or the quantum of the bills raised by the department. The arbitrator preliminarily heard the matter on 10.05.1999 directing the parties to submit the relevant documents to decide the dispute and at the request of the counsel appearing for the appellant, after submitting the

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details of calls under dispute, the matter was adjourned to 20.05.199 and again to 21.06.1999, and even on 21.06.1999 the appellant failed to file any documents, but on the other hand, chosen to file an objection regarding the procedure adopted in conducting arbitration proceedings. In fact, the said objection has been considered and the arbitrator, after examining the objection, held that no grounds have been made for withdrawing the arbitrator and the arbitration proceedings can be entertained and the dispute can be decided.

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In so far as the dispute with regard to the bills of the aforesaid two telephone lines are concerned, admittedly, at the request of the appellant, the said two telephones were connected to an electronic exchange and provided a dynamic STD locking facility. Therefore, there was no scope for misuse of the said two telephones when the dynamic STD locking facility is provided and the person who knows code of unlocking alone is entitled to open and close, as the secret password is known to the subscriber alone, but not even to the departmental persons. The ISD facility was provided for the telephone Nos.238790 and 215449 on 01.10.1998 and 04.06.1998 respectively at the request of the subscriber, and the particulars of the telephone bills show that during the relevant period, the ISD calls were made to Dubai and USA and appellant himself stated in the written statement that certain calls have been made to Dubai also. The arbitrator observed that immediately after making ISD calls, the local calls were also made, and therefore, We are of the opinion that except making bald and untenable allegations, no material whatsoever has been placed in support of the contentions of the appellant that the arbitrator was biased in favour of respondent and that the arbitrator has not given any reasonable opportunity. We are of the opinion that the

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learned single Judge has rightly held that in so far as the appointment of departmental arbitrator is concerned, Section 7-B of the Telegraph Act provides that the arbitrator shall be appointed by the Central Government, therefore, the power vests with the Central Government and this power could not be exercised by the Court by appointment an arbitrator on its own, and therefore, the appointment of a person working in the Department of Telephones by the Central Government is not contrary to the statute or the directions issued in the earlier writ petition i.e. in W.P.34480 of 1998, dated 15.12.1998. In the earlier writ petition i.e. in W.P.34480 of 1998, this Court only expressed its wish and did not direct the respondents to necessarily appoint an arbitrator who did not belong to the Department. Therefore, the appointment of an arbitrator by the Central Government, who is an officer of the Telecommunications Department, would not in any way vitiate the award passed by him, more so, when the matter is technical in nature.

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Having regard to the facts of the case, We do not find any illegality or biased attitude or misconduct on the part of the arbitrator in passing the award dated 23.06.1999, confirming the earlier demand, holding that the appellant himself made local, STD and ISD calls registered in various printouts during the disputed period 15.04.1998 to 15.10.1998, and hence, We are of the opinion that the award passed by the arbitrator is legal and valid. The appellant never questioned the appointment order appointing the arbitrator by the Central Government. He entered appearance and participated in the arbitration proceedings. Merely because the arbitrator belongs to an officer of the Department and in view of the technical nature of the aspect, it cannot be said that the said arbitrator had a biased attitude towards the

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appellant.

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For the foregoing reasons, We do not see any merit in the present Writ Appeal and the same is, accordingly, dismissed. However, if the appellant has not paid the balance amount of demand, pursuant to the status quo orders passed by this Court dated 22.07.1999, We grant six weeks time to the appellant from the date of this judgment for payment of the said arrears, failing which, it is open for the respondents to take appropriate action, pursuant to the earlier demand, notice and award of arbitration. No order as to costs.

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____________________ V.ESWARAIAH,J

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G.V.SEETHAPATHY,J

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Dated: 02.09.2008 Dsr

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........REGISTRAR

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Vst Industries Ltd. v. Divl.Eng.Nampally and 3

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Vst Industries Ltd. v. Divl.Eng.Nampally and 3

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