Full Judgment Text
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PETITIONER:
UNION OF INDIA AND ANOTHER
Vs.
RESPONDENT:
M/S. JAGAJIT INDUSTRIES AND ANOTHER
DATE OF JUDGMENT: 06/05/1999
BENCH:
V.N.Khare, U.C.Banerjee
JUDGMENT:
V.N.KHARE, J
Respondent herein has a telephone connection. It
appears that certain dispute arose in respect of the bills
submitted by the appellants towards telephone charges.
Consequently, the matter was referred to an arbitrator under
Section 7-B of the Indian Telegraph Act, 1885 (hereinafter
referred to as the Act). On 20.8.1992, the arbitrator
entered into the reference and on 18th December, 1992, he
gave a non-speaking award. This award was challenged by the
respondents by means of a writ petition under Article 226 of
the Constitution before the Punjab & Haryana High Court. A
Division Bench of the High Court having found that the award
does not contain any reason, set aside the award and
remitted the matter back to the arbitrator for giving a
speaking award. It is against this judgment, the Union of
India is in appeal. Learned counsel appearing for the
appellants urged that in view of the decision in the case of
M.L.Jaggi vs. Mahanagar Telephones Nigam Ltd & Ors(1996) 3
SCC 119, the requirement of giving reasons in the award by
the arbitrator has to be applied prospectively and for that
reason judgment under appeal deserves to be set aside. In
brief, the argument is that a non-speaking award given prior
to decision in M.L.Jaggis case (supra) has to be upheld.
After having gone through the judgment, we find that
the argument of the learned counsel is not based on the
correct interpretation of paragraphs 8 and 9 of the said
decision. Paragraphs 8 and 9 are reproduced below :
8. 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 open 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 the award is judicial review under Article
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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 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. 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.
9. Since we have decided this question for the first
time, it must be treated that any decision made prior to
this day by any arbitrator under Section 7-B of the Act is
not liable to be reopened. In other words, the order is
prospective in its operation.
A combined reading of paragraphs 8 and 9 shows that
what has been prohibited by the aforesaid decision is only
regarding reopening of the awards which have already
attained finality. The injunction contained in paragraph 9
of the decision is not applicable to cases where decisions
given under Section 7-B of the act were challenged on
account of absence of reason in the award prior to the said
decision. This view of our finds support from the fact that
this Court in Gurbachan Singhs case (supra) has set aside
the decision of the arbitrator which was found lacking in
reasons. So far as the present case is concerned, the award
was challenged before the High Court and the same was set
aside on 20.3.93. Therefore, what has been observed in
paragraph 9 is not applicable to the present case. We,
therefore, do not find any merit in this appeal and the same
is accordingly dismissed. There shall be no order as to
costs.