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J.N Seth v. Union Of India And Another

Madhya Pradesh High Court

Sep 8, 1990

Judgment

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Summary of Opinion

Factual and Procedural Background

This is an appeal against the order dated 17-2-1990 passed by the Fifth Additional Judge to the Court of District Judge, Jabalpur in Civil Suit No. 2-A of 1990 refusing to grant a temporary injunction against recovery of the appellant's telephone bills.

The appellant had been a member of the M.P. Telecom Advisory Committee (M.P.T.A.C.) from 28-6-1985 with term extended to 30-6-1989. In that capacity a free telephone (No. 28888) was installed at his residence: no rent and 1,200 local calls bi-monthly were allowed free. The appellant was also a subscriber of telephone No. 24382 and had two other telephones in his sons' names (21432 and 27121). The parties do not dispute these facts.

The appellant contends that no bills were issued in respect of telephone No. 28888 until August 1988 when a bill for Rs. 8,808/- was issued; a protest was made then. On 5-2-1990 the appellant paid bills for other telephones but on the same date received a bill for Rs. 1,16,298/- for telephone No. 28888, accompanied by a covering letter threatening disconnection of all his telephones if payment was not made by 15-2-1990. The appellant alleges malfunctioning/misuse and interception of lines, disputed the bills, requested appointment of an arbitrator under section 7-B of the Indian Telegraph Act, and filed petitions under sections 8, 22 and 33 of the Arbitration Act seeking appointment of an arbitrator and quashing recovery. He also moved an application under section 41 of the Arbitration Act read with Order 39, Rules 1 and 2 CPC on 14-2-1990.

The trial Court rejected the application on the ground that respondent/defendant No. 1 had not yet been served and, relying on the M.P. Amendment Act No. 29 of 1984 under Order 39, Rule 2(2) CPC, held the application to be not maintainable. The appellant appealed that order.

Legal Issues Presented

Whether the appellant's application for appointment of an arbitrator under section 7-B of the Indian Telegraph Act is maintainable.
Whether the trial Court can grant a temporary injunction under section 41 of the Arbitration Act read with Order 39, Rules 1 and 2 of the Code of Civil Procedure to restrain disconnection or recovery pending arbitration.

Arguments of the Parties

Appellant's Arguments

The correctness of the bills for telephone No. 28888 was disputed from the time the first bill (August 1988) was issued; the appellant sought verification and resolution by appointment of an arbitrator under section 7-B of the Indian Telegraph Act.
The appellant alleged malfunctioning, misuse by linemen or telephone department staff, and that "undesirable persons were intercepting the lines" resulting in exorbitant bills; this dispute falls under section 7-B and requires appointment of an arbitrator.
The appellant applied under sections 8, 22 and 33 of the Arbitration Act for appointment of an arbitrator and under section 41 of the Arbitration Act (read with Order 39, Rules 1 & 2 CPC) for interim relief; he protested the bill and contested the demand, so recovery/disconnection should be stayed pending arbitration.

Respondents' Arguments

The respondents raised a preliminary objection that the dispute was not covered by section 7-B of the Indian Telegraph Act and therefore the appellant's application for appointment of an arbitrator was not maintainable.
Learned counsel for the respondents disputed the appellant's submissions and supported the trial Court's order; the trial Court had rejected the application partly because respondent/defendant No. 1 had not been served and under the M.P. Amendment Act No. 29 of 1984 as applied to Order 39, Rule 2(2) CPC the application was not maintainable.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Raghubir Dayal v. Union of India, AIR 1970 All. 143-145	That disputes about actual meter reading and whether the meter has been correctly and honestly noted down fall within the purview of section 7-B of the Indian Telegraph Act.	The court relied on this decision to hold that disputes as to meter reading/accuracy of bills fall under section 7-B and must be referred to arbitration.
Rasiklal v. Divl. Engi., Raipur, 1964 MPLJ 831 (D.B.)	That disputes about disconnecting telephone from a person's premises are covered by section 7-B of the Act as matters to be referred to arbitration.	The court cited this case to support that disputes about disconnection fall within section 7-B.
Union of India v. Usha Spinning and Weaving Mills Ltd., AIR 1982 Delhi 111	That if the correctness of the bill is challenged on the ground of malfunctioning or misuse of lines, a dispute concerning telegraph line/apparatus/appliance within section 7-B will arise.	The court relied on this Delhi High Court judgment to confirm that challenges to bill correctness on malfunction/misuse grounds fall within section 7-B.
Prithvi Raj Kohli v. Union of India, AIR 1988 J. & K. 17	That section 7-B does not oust the jurisdiction of the Civil Court to refer matters to the Central Government for appointment of an arbitrator; the bar in s.7-B relates to the Court's jurisdiction over awards (modifying, remitting, setting aside) but not to referral to the Central Government.	The court relied on this decision to conclude that the Civil Court has jurisdiction to entertain an application for appointment of an arbitrator and that the preliminary objection to maintainability had no merit.
Nitrananda v. P.M.G. Bhubaneshwar, AIR 1977 Orissa 48	The court referred to this case as one that was dissented from in the Prithvi Raj Kohli decision.	The opinion notes that Nitrananda was dissented from and therefore does not support the respondents' preliminary objection.
Orissa Vegetable Oil Complex Ltd. v. Union of India, AIR 1990 Orissa 51	That disconnection of telephones pending a dispute regarding excess bills and false metering is illegal; where the subscriber has protested, only amounts admitted by him are due and the disputed amounts must be determined by the arbitrator before invoking disconnection rules.	The court applied this principle to restrain respondents from disconnecting the appellant's other telephone numbers during the pendency of the arbitration and to direct that recovery not be pursued until the arbitrator decides the dispute.

Court's Reasoning and Analysis

The court examined the facts and correspondence and concluded there was a genuine dispute about the correctness of the bills and about disconnection. The appellant had contested bills for telephone No. 28888 on grounds including malfunctioning, misuse by linemen or staff, and interception of lines. The court treated questions of actual meter reading and whether the meter was correctly recorded as within the ambit of section 7-B of the Indian Telegraph Act, relying on Raghubir Dayal.

The court observed that disputes about disconnection of telephone service also fall within section 7-B, relying on Rasiklal and supporting authority (Union of India v. Usha Spinning and Weaving Mills Ltd.) which held that challenges to bill correctness based on malfunction/misuse give rise to disputes concerning telegraph lines/appliances under section 7-B.

Addressing the respondents' preliminary objection that an application for appointment of an arbitrator was not maintainable, the court referred to Prithvi Raj Kohli (Jammu & Kashmir High Court) which held that section 7-B does not oust civil court jurisdiction to refer disputes for appointment of an arbitrator; the limitation in s.7-B pertains to challenging awards. The court noted that Nitrananda had been dissented from in that decision and, therefore, found the preliminary objection without merit. It held that the application for appointment of an arbitrator was maintainable before the Civil Court.

Concerning interim relief, the trial Court had refused to grant temporary injunction relying on the M.P. Amendment Act No. 29 of 1984 under Order 39, Rule 2(2) CPC. The appellate court noted that the trial Court did not consider section 41(b) of the Arbitration Act, under which a Court has power to issue interim injunctions. The court relied on Orissa Vegetable Oil Complex Ltd. v. Union of India to the effect that disconnection pending a dispute about excess bills or false metering is illegal, and that disputed amounts must be determined by an arbitrator before disconnection can be validly effected.

Applying that principle, the court observed telephone No. 28888 had already been disconnected but there was an imminent threat to other telephone numbers (24382, 21432 and 27121). The court concluded that unless the dispute was referred to and decided by an arbitrator, it was necessary to restrain the respondents from disconnecting the other telephone numbers. Accordingly, the respondents were restrained from disconnecting those numbers and from recovering the disputed amount until the arbitrator decides the matter.

Holding and Implications

APPEAL ALLOWED.

Holding:

The application for appointment of an arbitrator under section 7-B of the Indian Telegraph Act is maintainable before the Civil Court; the Civil Court has jurisdiction to entertain such an application.
The trial Court's order refusing temporary injunction was set aside insofar as it refused to restrain disconnection and recovery pending arbitration.

Direct effects and directions:

The respondents are directed not to disconnect telephone numbers 24382, 21432 and 27121 during the pendency of the application and until the dispute is finally heard and decided by the arbitrator.
The respondents are directed not to recover the disputed amount until the arbitrator finally determines the matter.
There shall be no order as to costs.

Implications:

The decision restrains immediate disconnection and recovery in these proceedings and requires resolution by arbitration under section 7-B where disputes concern bill correctness, meter reading, malfunction, misuse or disconnection.
The opinion does not purport to create a new precedent beyond applying and relying on the cases cited; its effects are directed at the parties in this appeal.

Appeal allowed.

Show all summary ...

1. This is an appeal against the order dated 17-2-1990 passed by the Fifth Additional Judge to the Court of District Judge, Jabalpur in Civil Suit No. 2-A of 1990 refusing to grant temporary injunction against the recovery of the telephone bills of the appellant.

2. In this case, the respondents have raised a preliminary objection that the application of the appellant for appointment of an arbitrator is not maintainable because the dispute is not covered under section 7-B of the Indian Telegraph Act (hereinafter referred to as ‘the Act’).

3. For deciding the preliminary objection, it is necessary to mention some facts here. The appellant was nominated as a member of the M.P Telecom Advisory Committee on 28-6-1985. His term was extended upto 30-6-1989. In his capacity as a member of the M.P.T.A.C, a free telephone No. 28888 was provided to him and was installed at his residence. No rent was to be charged for the said telephone and 1200 local calls bi-monthly were allowed free on the said telephone. The appellant is also a subscriber of the telephone No. 24382. He has also other two telephones bearing numbers 21432 and 27121 in the name of his sons Sanjay Seth and Dr. Ajay Seth. This position is not denied by the parties.

4. According to the appellant, from the date of the installation of the telephone No. 28888, no bills of this telephone were ever issued to him. The bills issued on other telephones were duly paid on 5-2-1990, the appellant received a bill of Rs. 1,16,298/- on his telephone No. 28888, which was allotted to him in his capacity as a member of the M.P.T.A.C A covering letter signed by the respondent No. 2 was sent threatening that if this bill is not paid by 15-2-1990, all his telephones will be disconnected. The appellant further submitted that for the first time in August, 1988, a bill on this telephone was issued for Rs. 8,808/-. The bill was absolutely wrong and, therefore, a protest was made and the respondents were called upon to appoint an arbitrator under section 7-B of the Act for resolving the dispute. Instead of resolving the dispute by appointing an arbitrator, the respondent No. 2 has issued the impugned bill for Rs. 1,16,298/- along with a threat of disconnection of all other telephones in the event of non-payment. Finding no response, and apprehending imminent threat of disconnection of all the telephones, the appellant filed a petition under sections 8, 22 and 33 of the Indian Arbitration Act praying the lower Court for appointment of an arbitrator and quashing the recovery. The application under section 41 of the Arbitration Act read with Order 39, Rules 1 and 2, Civil Procedure Code was also moved by the appellant on 14-2-1990. Learned counsel for the respondents has disputed the submissions of the appellant and supported the order of the trial Court.

5. The trial Court has rejected the application on the ground that the respondent/defendant No. 1 has not yet been served and in view of the M.P Amendment Act No. 29 of 1984 under Order 39, Rule 2(2) of the Code of Civil Procedure, the application is not maintainable.

6. Now two points remain to be determined: (i) Whether the application of the appellant for appointment of an arbitrator is maintainable and (ii) whether a temporary injunction can be granted by the trial Court under section 41 of the Arbitration Act read with Order 39, Rules 1 and 2, Civil Procedure Code.

7. So for as the maintainability of the application for appointment of an arbitrator is concerned, section 7-B of the Indian Telegraph Act speaks as under:—

“7-B. 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 purposes 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.”

8. The only objection of the learned counsel for the respondents is that before filing an application for appointment of an arbitrator, the appellant had not prayed or asked for appointment of an arbitrator. The submission of the learned counsel for the appellant is that, the appellant has always disputed the correctness of the bills and challenged them to be decided after verification.

9. While going through various correspondences between the parties. I am of the opinion that there is a dispute relating to the correctness of the bills and the dispute about disconnection. Here the appellant has also challenged the correctness of the telephone bills on the ground of malfunctioning or misuser of the telephone lines by lineman and other staff of the telephone department. The dispute relating to the actual meter reading involving the question as to whether the meter has been correctly and honestly noted down clearly falls within the purview of section 7-B of the Act, as held in Raghubir Dayal v. Union of India AIR 1970 All. 143-145. So also the dispute about disconnecting telephone from a person's premises is covered by section 7-B of the Act in the matter which is the subject matter to be referred to arbitration as held in Rasiklal v. Divl. Engi., Raipur. 1964 MPLJ 831 (D.B). Relying on the above judgment of this Court, the Delhi High Court in a judgment reported in Union of India v. Usha Spinning and Weaving Mills Ltd., AIR 1982 Delhi 111 has held that in the event the correctness of the bill is challenged on the ground of malfunctioning or misuser of lines, surely a dispute concerning the telegraph line, apparatus or appliances within the meaning of section 7-B of the Act will spring up. In paragraph 5 of the petition of the appellant under sections 8, 22 and 33 of the Indian Arbitration Act, the appellant has made allegations that “during investigation it was detected that some undesirable persons were intercepting the lines which resulted in exorbitant bill”. This type of dispute is covered as per judgment of the Delhi High Court and our High Court under section 7-B of the Act. It is also to be noted that the telephone set provided to the subscriber being appliance within the meaning of section 7-B of the Act, question of recovery of bills, relating to its user, would fall under section 7-B of the Act and the dispute is to be resolved by appointment of an arbitrator. It was the duty of the Department to have appointed an arbitrator no sooner the dispute of the correctness of the bill is raised.

10. The High Court of Jammu and Kashmir in a case reported in Prithvi Raj Kohli… v. Union Of India…., AIR 1988 J. and K. 17 while interpreting the provisions of section 7-B of the Act has held that section 7-B of the Act does not in any manner oust the jurisdiction of the Civil Court. The only bar contained in this provision is regarding the Court's jurisdiction to modify, remit and set aside the award and make it a rule of Court in accordance with the provisions of the Arbitration Act but so for as referring the matter in dispute between the parties to the Central Government for appointment of an arbitrator is concerned, the Civil Court has jurisdiction. In this case, Nitrananda v. P.M.G Bhubaneshwar, AIR 1977 Orissa 48 has been dissented from. As such, the preliminary objection has no merit. It is held that the application for appointment of an arbitrator is maintainable before the Civil Court and, the Civil Court has jurisdiction to entertain such an application.

11. So for as grant of temporary injunction is concerned, in para 8 of the impugned order, the Court has rejected the application for grant of temporary injunction in view of the M.P Amendment Act No. 29 of 1984 under Order 39, Rule 2(2) of the Code of Civil Procedure but the Court has not considered the provision of section 41(b) of the Arbitration Act under which the Court has power to issue an interim injunction. In Orissa Vegetable Oil Complex Ltd.… v. Union Of India…Opposite Party., AIR 1990 Orissa 51 it has been held that the disconnection of telephones pending dispute regarding excess bills and false metering is illegal. The demand raised under the bills, against the subscriber cannot be said to be due from him if he has raised a protest against the same and the dues have not been finally determined by the arbitrator. In such an event, the only amount which would be due against the subscriber is the amount which is admitted by him as his due and the rest of it, which is disputed, must be determined by the arbitrator and only on failure to pay the dues, as determined by the arbitrator, on a demand being raised, power under the rules can be invoked to effect disconnection. Once a dispute is there, it can be solved only in the manner as provided in section 7-B of the Act and not otherwise. No doubt, in this case, the telephone number 28888 of the appellant has already been disconnected but there is an imminent threat of disconnecting his telephone number 24382 and other telephones of his-sons bearing numbers 21432 and 27121. Unless the matter in dispute is referred to and decided by an arbitrator, it is necessary to restrain the respondents from disconnecting the other telephone numbers of the appellant. The respondents are, therefore, restrained from doing so during the pendency of the application, and decision by the arbitrator of the dispute raised.

12. In the result, the appeal is allowed and the order of the trial Court is set aside. The respondents are directed not to disconnect telephone numbers 24382, 21432 and 27121 and not to recover the amount till the matter is heard and decided finally by the Arbitrator. However, there shall be no order as to costs.

Appeal allowed.