Mahanagar Telephone Nigam Ltd. vs P.K. Mehrotra And Anr.
2001 Latest Caselaw 1335 Del

JUDGMENT

Mahmood Ali Khan, J.

1. This writ petition is filed by the petitioner, Mahanager Telephone Nigam Limited (in short MTNL) assailing the award dated 28.7.1999 passed by Mr. P.K. Mehrotra, Arbitrator as being violative of Section 7-B(2) of Indian Telegraph Act (hereinafter called the Act).

2. The factual matrix of the case is that respondent no.2 was provided a telephone No.583779 which was subsequently closed and a new number 5744090 was provided to him on 14.10.1991 with dynamic STD control facility. According to the petitioner the respondent no.2 was using this telephone for business, social and personal use. He was running a business in the style of M/s New Metals Manufacturing Co., Mayapuri Industrial Area, Phase-II, New Delhi and has admitted the use of the telephone for business purpose also. The first bill dated 1.11.1992 after installation was issued for the period from 14.10.1991 to 15.10.1992 for a sum of Rs. 1,64,097/-. After cancellation of rent the net amount payable was Rs. 1,62,317/-. It was for 146215 net calls. The respondent made a representation against the bill. The petitioner, thereafter, issued a provisional bill for a sum of Rs. 24,395/- keeping the balance sum of Rs. 1,37,922/- pending. After through investigation the representation/complaint made by respondent no.2 against the bill dated 1.11.1992 was rejected vide letter dated 1.6.1993 and he was requested to pay the outstanding amount of the bill. Since the bill was issued for one year the respondent was granted liberty to make the payment in Installment. On 21.4.1993 he filed a petition under Section 20 of the Arbitration Act for reference of the dispute in respect of the bill dated 1.11.1992 to the Arbitrator which was registered in this court as suit No.2143/1993. This court vide order dated 18.4.1996 referred the dispute for the billing cycle from 14.10.1991 to 15.10.1992 to the Arbitrator under Section 7B of the Act on the condition that the respondent no.2 shall deposit the balance amount. On 26.7.1996 Mr. P.K. Mehrotra, Deputy General Manager (TR), and the petitioner was appointed as arbitrator to adjudicate the dispute between the parties. Without appreciating the fact and without considering the document, respondent no.1, being Arbitrator, passed the award 28.7.1999 whereby a rebate of 138510 calls out of the total 146215 charged calls has been granted. This rebate is about 95% of the total charged calls. The impugned award is absolutely without reasoning and is non-speaking award. It shows lack of application of mind as much as it was accepted by the arbitrator that the telephone in question was provided with dynamic STD control facility, therefore, possibility of misuse or pilferage was absolutely ruled out and even further there was a spurt due to excessive and liberal use of the telephone facility by respondent no.2. Respondent no.2 has used the telephone liberally and excessively for his business purposes and for his social and personal need. It was prayed that the award may be quashed and it be declared that respondent no.2 was liable to pay balance amount of the bill dated 1.11.1992.

3. In the reply to the cause notice respondent no.2 stated that the petitioner has voluntarily acted upon and implemented the award by making a refund of a sum of Rs. 1,50,581/- by cheque No. 425169 drawn on Oriental Bank of Commerce on account of the rebate of 138510 calls in terms of the award. Since the award has been implemented, the question of setting aside the award did not arise. he further alleged that the petitioner had not sent any bill for about one year after the installation of the telephone despite repeated requests for it by the respondent. On his complaint the petitioner supplied the bill for Rs. 24,395 taking the average of the calls made by him but later on the entire bill was revived and illegal demand was made.

4. On the suggestion of the counsel for the parties, the arguments were heard for final disposal of the writ petition.

5. Counsel for the petitioner has submitted that the award dated 28.7.1999 given by respondent no.1 is a non-speaking and reasonless award and it is in contravention of the provision of Section 7-B of the Act. He has argued that the award is liable to be set aside and the matter was required to be remitted by the Arbitrator/respondent no.1 for making the award and give reason in support thereof. he cited M.L.Jaggi v. Mahanagar Telephone Nigam Limited and Ors. in support of his arguments.

6. The counsel for the respondent, on the other hand, has submitted that the judgment cited by the counsel for the petitioner does not come to the rescue of the petitioner because in the instant case the award has been accepted and has been fully implemented as much as a sum of Rs. 1,50,581/- has been refunded by the petitioner. During argument, it was submitted that the refund cheque was issued to the respondent no.2 sometimes in April, 2000 since it was deposited by respondent no.2 in his bank on 22.4.2000. He, therefore, submitted that nothing survives and the writ petition deserve to be dismissed for this reason alone.

7. In the reply the counsel for the petitioner has submitted that the refund of the amount was made by the Accounts Office of the petitioner which is situated in Karol Bagh in ignorance of filing of this writ petition assailing the award. It is submitted that the Law Office of the petitioner is housed in Khurshid Lal Bhawan at Janpath and as soon as the petitioner came to know about this refund, disclinary action had been taken against he officer who had issued the refund cheque. It is submitted that the refund of the amount by the Accounts Office of the respondent in ignorance of the pendency of this writ petition would not act as a promissory estoppel against the petitioner.

8. I have given careful consideration to the submissions made at the bar. It is not denied that this petition was filed in February, 2000 and it was taken up for hearing on 21.3.2000. A show-cause notice was issued for 11.8.2000. Even according to the counsel for respondent no.2 his client had applied for refund of the amount in terms of the award in July, 1999 but, the amount was actually refunded only in April, 2000 after filing of the writ petition. Therefore, the contention of the petitioner that the refund cheque was issued by the Accounts Office which is located at a different place in ignorance of the challenge made by the petitioner to the award is tenable. The payment made by the respondent, therefore, was not in acceptance of the award. It cannot be held that the petitioner is estopped from assailing the award now. The arguments of the counsel and is repelled.

9. The relevant extract of the award made by respondent no.1 is as under:-

"After considering the various facts and figures and records and other documents including FNMR and STD details, I am inclined to accept the version of the respondent that the telephone no.573390 is provided with Dynamic STC Control facility. Screening of the FNMR reveals of clear cut spurt in the fortnightly period ending 15.5.1992, 01.6.1992, 15.6.1992 and 01.7.1992 respectively. The claimant is a low calling subscribed. I have made the award that a rebate of 1,38510 calls (one lac thirty eight thousand five hundred and ten calls) in bill dated 1.11.92 is allowed to claimant."

10. No reason has been given by respondent no.1 for making the award. Section 7-B of the Act reads as under:-

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 purpose 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 the parties to the dispute and shall not be questioned in any Court."

11. The Supreme Court examined this provision in M.L. Jaggi's case supra. It was observed in para 8 of the judgment:

"It is, thus, settled law that reasons are required to be recorded when it affects the public interest. It is seen that under Section 7-B, the award is conclusive 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 Section 7-B of the Act. By necessary implication, when the arbitrator decides the dispute under Section 7-B, he is enjoined to give reasons in support of his decision since it is final and cannot be questioned in a court of law. The only obvious remedy available to the aggrieved person against he award is judicial review under Article 226 of the Constitution. 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 reason 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. No doubt, as rightly pointed out by Mr. V.R. Reddy, Additional Solicitor General, the questions are technical matters. But nonetheless, the reasons in support of his conclusion should be given. In this case, arbitrator has not given reasons. The award of the arbitrator is set aside and the matter is remitted to the arbitrator to make an award and give reasons in support thereof."

12. Applying the principles of law enunciated in the above judgment of the Supreme Court there is no escape from holding that the award made by respondent no.1 and impugned in this writ petition is made in contravention of Section 7-B of the Act. It does nt give any reason. The judgment cited by the petitioner squarely covers the facts of the instant case also.

13. Having regard to the above discussion, the petition succeed. The award dated 28.7.1999 made by respondent no.1 is set aside. The matter is remitted to respondent no.1 for making a fresh award and give reasons in support thereof. Parties shall appear before the Arbitrator on 12.9.2001. In the circumstances of the case, parties shall bear their own costs.