JIGNESH SHASHIKANT PATEL (EMPLOYEE CODE - 3472) v. GENERAL MOTORS INDIA PVT. LTD.

been filed by Group of Former Employees of General Motors India Private Limited with a prayer that an Arbitrator be appointed to adjudicate upon the dispute that arose between itself and the respondent General Motors India Private Limited.

2. Brief facts leading to the filing of the petition are as under:

2.1 It is the case of the petitioners that the dispute between the petitioner and the respondent is with regard to the payment of fair and just differential amount of compensation reckoned and paid to the petitioners under the Voluntary Severance Scheme - Hourly 2017, executed between the petitioners and the respondent.

Page 2 of 31

2.2 It is the case of the petitioners that the respondent company on 29.07.2015 announced plans to restructure its manufacturing operations in India through closure of its manufacturing plants situated at Halol, Gujarat. Pursuant to the said decision, the VSS Scheme was launched to reduce the strength of the permanent employees. An eligible employee was entitled to compensation as per the formula under the scheme. It is the case of the petitioners that due to inadvertence caused in calculation of compensation for the petitioners under the scheme and its rule, the petitioners were compelled to accept compensation as per their Free-LTS-2016 WAGES. It is their case that as per the memorandum of the settlement arrived at between the parties in the year 2017, the petitioners were eligible for obtaining compensation post the Long Term Settlement -

Page 3 of 31

2016 wages. In this way, the petitioners suffered financial loss despite being legally eligible for the same.

3. Mr.Arjunbhai Dabhi learned advocate appearing for the petitioners would submit that in the settlement entered into between the parties, there was an arbitration clause which provided that all disputes between the parties arising out of or relating to the agreement, shall be referred to arbitration. He would therefore submit that in terms of the settlement arrived at under Section 12(3) of the Industrial Disputes Act, 1947, the petitioners were entitled to compensation being calculated on the revised effective salary and allowances with effect from 01.02.2017 and not salary as on 01.04.2016. Accordingly, a notice was given to the respondent on 20.08.2020 invoking the arbitration clause in terms of para 6

Page 4 of 31

of the agreement. Mr.Dabhi would therefore submit that it would be just and proper for this Court to appoint an arbitrator so as to settle the dispute.

3.1 Mr.Arjunbhai Dabhi would rely on the following decisions:

I. Decision of the Division Bench of this Court in case of Lords Inn Hotels and Developers Ltd. v. Raysons Residency Pvt. Ltd. rendered in

Petition under Arbitration Act No.23 of 2019

II. In case of Babanrao Rajaram Pund v. Samarth Builders & Developers & Anr.

reported in AIR 2022 SC 4161

III. In case of Malaysian Airlines Systems Bhd

v. Stic Travels Private Limited reported in

2001 - AIR (SC)-0-358

4. Mr.Aspi Kapadia learned advocate appearing with

Page 5 of 31

Mr.Parth S. Shah learned advocate for the respondent-company submits that the contentions raised by the arbitrator-petitioner are misconceived. He would submit that the petitioners having voluntarily opted for VSS and having received the total amount of monthly compensation and having accepted the same, cannot now turn around and seek arbitration on the ground that there was a mistake in computation of compensation. The VSS was purely a contractual arrangement.

4.1 Relying on the affidavit in reply filed to the arbitration petition, Mr.Kapadia would submit that the dispute is non-arbitrable as it is essentially a dispute between the workmen and the management of the company under the Industrial Disputes Act. He would submit that Section 10A of the Industrial Disputes Act

Page 6 of 31

provides for a detailed mechanism on how arbitration shall proceed. Essentially, the dispute that is sought to be raised by the petitioners is an 'industrial dispute' and is not a dispute for which the arbitration clause can be invoked.

4.2 Mr.Kapadia would submit that it is settled law that matters relating to special rights or liabilities created under a statute which lie within the exclusive jurisdiction of specific courts or tribunal are not arbitrable.

4.3 Secondly, Mr.Kapadia would submit that the notice invoking arbitration was issued after the expiry of three years from the date on which the cause of action arose. In the instant case, the VSS agreements were executed in August 2017 whereas the notice invoking the arbitration was issued on January 23, 2021, more than three years

Page 7 of 31

after the compensation was already paid. He would therefore submit that it is not a live claim or a dispute.

4.4 Mr.Kapadia would further submit that having willingly agreed to the compensation package under the Scheme and in absence of any proof of coercion or undue influence, it is not open for the petitioners to submit that it was the mistake of calculation.

4.5 Mr.Aspi Kapadia in support of his submissions would rely on the following decisions:

I. Bharat Sanchar Nigam Ltd. v. Nortel Networks India Pvt Civil; Appeal Nos. 843- 844 of 2021

II. Kingfisher Airlines v. Captain Prithvi Malhotra and others; 2013 (7) Bom CR 738

Page 8 of 31

III. Rajesh Korat v. Innoviti Embedded Solutions Pvt. Ltd.; 2017 SCC OnLine Kar

4975

IV. Union of India v. Mastern Construction,;

(2011) 12 SCC 349

V. Bank of India v. OP Swaranakar,; AIR

2003 SC 858

VI. P.K. Ramaiah and Company v. Chairman & Managing Director, National Thermal Power; 1994Supp(3)SCC126 Corpn.

VII. National Textile Corporation Limited v. Presiding Officer and Ors.; 2013(3) SLR 164

VIII. Steel Authority of India Limited v. J.C. Budharaja; (1999) 8 SCC 122

IX. SMS Tea Estates Pvt Ltd. v. Chandmari Tea Company Pvt Ltd.; (2011) 14 SCC 66

X. Garware Wall Ropers Ltd. v. Coastal Marine Constructions & Engineering Ltd.;

(2019) 9 SCC 209

Page 9 of 31

XI. NTPC Ltd. v. SPML Infra Ltd.; 2023 SCC OnLine SC 389

5. Having heard learned advocates for the respective parties, what is evident from the facts narrated is that General Motors India Private Limited announced its plans to restructure its manufacturing operations in India through closure of its Halol Plant. On 03.02.2017, it announced the VSS scheme with a view to reduce the overall existing strength of the permanent employees at Halol. The announcement provided the details of the scheme and the details of computation of payments to be made to the employees was very clear. Each of the petitioners agreed to opt for the scheme and accepted the amounts. The employees irrevocably and unconditionally waived their claims or entitlements in light of the settlement. A

Page 10 of 31

settlement was arrived at on 16.03.2017 under Section 12(3) of the Industrial Disputes Act.

5.1 In the decision in case of Bharat Sanchar Nigam (supra) the Hon'ble Supreme Court was considering the question of period of limitation in filing a petition seeking appointment of an arbitrator. Considering the legislative history of Section 11 of the Arbitration Act, in relevant paras of the judgement, the Supreme Court held as under:

"36. In a recent judgment delivered by a three-judge bench in Vidya Drolia v. Durga Trading Corporation19, on the scope of power under Sections 8 and 11, it has been held that the Court must undertake a primary first review to weed out "manifestly ex facie non-existent and invalid arbitration agreements, or non-arbitrable disputes." The prima facie review at the reference stage is to cut the deadwood, where dismissal is bare faced and pellucid, and when on the facts and law, the litigation must stop at the first stage. Only when the Court is certain that no valid arbitration agreement exists, or that the subject matter is not arbitrable, that reference may be refused. In paragraph 144,

Page 11 of 31

the Court observed that the judgment in Mayavati Trading had rightly held that the judgment in Patel Engineering had been legislatively overruled.

Paragraph 144 reads as :

"144. As observed earlier, Patel Engg. Ltd. explains and holds that Sections 8 and 11are complementary in nature as both relate to reference to arbitration. Section 8 applies when judicial proceeding is pending and an application is filed for stay of judicial proceeding and for reference to arbitration. Amendments to Section 8 vide Act 3 of 2016 have not been omitted. Section 11 covers the situation where the parties approach a court for appointment of an arbitrator. Mayavati Trading (P) Ltd., in our humble opinion, rightly holds that Patel Engg. Ltd. has been legislatively overruled and hence would not apply even post omission of sub-section (6-A) to Section 11 of the Arbitration Act. Mayavati Trading (P) Ltd. has elaborated upon the object and purposes and history of the amendment to Section 11, with reference to sub-section (6-A) to elucidate that the section, as originally enacted, was facsimile with Article 11 of the Uncitral Model of law of arbitration on which the Arbitration Act was drafted and enacted." (emphasis supplied) While exercising jurisdiction under Section 11 as the judicial forum, the court may exercise the prima facie test to screen and knockdown ex facie meritless, frivolous, and dishonest

Page 12 of 31

litigation. Limited jurisdiction of the Courts would ensure expeditious and efficient disposal at the referral stage. At the referral stage, the Court can interfere

"only" when it is "manifest" that the claims are ex facie time barred and dead, or there is no subsisting dispute. Paragraph 148 of the judgment reads as follows :

"148. Section 43(1) of the Arbitration Act states that the Limitation Act, 1963 shall apply to arbitrations as it applies to court proceedings. Sub-section (2) states that for the purposes of the Arbitration Act and Limitation Act, arbitration shall be deemed to have commenced on the date referred to in Section 21. Limitation law is procedural and normally disputes, being factual, would be for the arbitrator to decide guided by the facts found and the law applicable. The court at the referral stage can interfere only when it is manifest that the claims are ex facie time- barred and dead, or there is no subsisting dispute. All other cases should be referred to the Arbitral Tribunal for decision on merits. Similar would be the position in case of disputed "no-claim certificate" or defence on the plea of novation and "accord and satisfaction". As observed in Premium Nafta Products Ltd. [Fili Shipping Co. Ltd. v. Premium Nafta Products Ltd., 2007 UKHL 40 : 2007 Bus LR 1719 (HL)] , it is not to be expected that commercial men while entering transactions inter se would knowingly create a system which would require that the court should first decide whether the

Page 13 of 31

contract should be rectified or avoided or rescinded, as the case may be, and then if the contract is held to be valid, it would require the arbitrator to resolve the issues that have arisen." In paragraph 154.4, it has been concluded that :

"154.4. Rarely as a demurrer the court may interfere at Section 8 or 11 stage when it is manifestly and ex facie certain that the arbitration agreement is non- existent, invalid or the disputes are non- arbitrable, though the nature and facet of non-arbitrability would, to some extent, determine the level and nature of judicial scrutiny. The restricted and limited review is to check and protect parties from being forced to arbitrate when the matter is demonstrably "non-arbitrable" and to cut off the deadwood. The court by default would refer the matter when contentions relating to non-arbitrability are plainly arguable; when consideration in summary proceedings would be insufficient and inconclusive; when facts are contested; when the party opposing arbitration adopts delaying tactics or impairs conduct of arbitration proceedings. This is not the stage for the court to enter into a mini trial or elaborate review so as to usurp the jurisdiction of the Arbitral Tribunal but to affirm and uphold integrity and efficacy of arbitration as an alternative dispute resolution mechanism." (emphasis supplied)

In paragraph 244.4 it was concluded that :

Page 14 of 31

"244.4. The court should refer a matter if the validity of the arbitration agreement cannot be determined on a prima facie basis, as laid down above i.e. "when in doubt, do refer".

37. The upshot of the judgment in Vidya Drolia is affirmation of the position of law expounded in Duro Felguera and Mayavati Trading, which continue to hold the field. It must be understood clearly that Vidya Drolia has not re-surrected the pre-amendment position on the scope of power as held in SBP & Co. v. Patel Engineering (supra). It is only in the very limited category of cases, where there is not even a vestige of doubt that the claim is ex facie time-barred, or that the dispute is non-arbitrable, that the court may decline to make the reference. However, if there is even the slightest doubt, the rule is to refer the disputes to arbitration, otherwise it would encroach upon what is essentially a matter to be determined by the tribunal.

38. Applying the law to the facts of the present case, it is clear that this is a case where the claims are ex facie time barred by over 5 1⁄2 years, since Nortel did not take any action whatsoever after the rejection of its claim by BSNL on 04.08.2014. The notice of arbitration was invoked on 29.04.2020. There is not even an averment either in the notice of arbitration, or the petition filed under Section 11, or before this Court, of any intervening facts which may have occurred, which would extend the period of limitation falling within Sections 5 to 20 of the

Page 15 of 31

Limitation Act. Unless, there is a pleaded case specifically adverting to the applicable Section, and how it extends the limitation from the date on which the cause of action originally arose, there can be no basis to save the time of limitation.

39. The present case is a case of deadwood / no subsisting dispute since the cause of action arose on 04.08.2014, when the claims made by Nortel were rejected by BSNL. The Respondent has not stated any event which would extend the period of limitation, which commenced as per Article 55 of the Schedule of the Limitation Act (which provides the limitation for cases pertaining to breach of contract) immediately after the rejection of the Final Bill by making deductions. In the notice invoking arbitration dated 29.04.2020, it has been averred that:

" Various communications have been exchanged between the Petitioner and the Respondents ever since and a dispute has arisen between the Petitioner and the Respondents, regarding non payment of the amounts due under the Tender Document."

The period of limitation for issuing notice of arbitration would not get extended by mere exchange of letters, 20 or mere settlement discussions, where a final bill is rejected by making deductions or otherwise. Sections 5 to 20 of the Limitation Act do not exclude the time taken on account of settlement discussions. Section 9 of the Limitation Act makes it clear that : "where once the time has begun to run, no subsequent disability or

Page 16 of 31

inability to institute a suit or make an application stops it." There must be a clear notice invoking arbitration setting out the

"particular dispute" 21 (including claims / amounts) which must be received by the other party within a period of 3 years from the rejection of a final bill, failing which, the time bar would prevail. In the present case, the notice invoking arbitration was issued 5 1⁄2 years after rejection of the claims on 04.08.2014. Consequently, the notice invoking arbitration is ex facie time barred, and the disputes between the parties cannot be referred to arbitration in the facts of this case.

40.Conclusion Accordingly, we hold that :

(i) The period of limitation for filing an application under Section 11 would be governed by Article 137 of the First Schedule of the Limitation Act, 1963. The period of limitation will begin to run from the date when there is failure to appoint the arbitrator; It has been suggested that the Parliament may consider amending Section 11 of the 1996 Act to provide a period of limitation for filing an 20 S.S.Rathore v. State of Madhya Pradesh (1989) 4 SCC 582. Union of India & Ors. v. Har Dayal (2010) 1 SCC 394. CLP India Private Limited v. Gujarat Urja Vikas Nigam Limited & Anr. (2020) 5 SCC 185. 21 Section 21 of the Arbitration and Conciliation Act, 1996. application under this provision, which is in consonance with the object of expeditious disposal of arbitration proceedings;

Page 17 of 31

(ii) In rare and exceptional cases, where the claims are ex facie time-barred, and it is manifest that there is no subsisting dispute, the Court may refuse to make the reference."

5.2 Admittedly in the case on hand, after the settlement was arrived at in the year 2017, the notice invoking the arbitration clause was issued only on 23.01.2021. The application was therefore hopelessly time-barred.

5.3 Having accepted the amount of compensation in full and final settlement thereof, it is not open for the petitioners to turn around and claim that the amount of compensation was not adequate in terms of the methodology worked out between the parties.

5.4 The other aspect of the matter is that essentially it is a matter of settlement entered

Page 18 of 31

into between the workmen and its employer under the provisions of the Industrial Disputes Act. In the case of Rajesh Korat (supra), the High Court of Karnataka, considered the question of applicability of the Arbitration Act as compared to the Industrial Disputes Act and the bench held as under:

"11. In the above background of facts and circumstances and law, the question that falls for determination is; Whether the provisions of Section 8 of the Arbitration and Conciliation Act, 1996 apply to proceedings pending before the labour court?

OR

Whether the provisions of Section 10 A (5) of the Act ousts the jurisdiction of the Arbitration Act in respect of proceedings pending before the labour court.

12. The Industrial Disputes Act, 1947 and the Arbitration and Conciliation Act, 1996 are no doubt special enactments. But, on a comparative basis it is seen that the Industrial Disputes Act is restricted in its operation and relates only to issues revolving around and involving a workman. A perusal of the Act would demonstrate that the Act is a beneficial piece of legislation and a social legislation enacted for the purpose of ameliorating the conditions of a workman. In

Page 19 of 31

fact, the object of the Act as stated is as follows:-

"An Act to make provision for the investigation and settlement of Industrial Disputes and for certain other purposes. Whereas it is expedient to make provision for the investigation and settlement of Industrial Disputes, and for certain other purposes herein after appearing."

13. It is hereby enacted as follows:- Thus what can be gleaned from the stated objective of the Act is that the purpose of the enactment is to make provisions for investigation and settlement of Industrial Disputes which form a class of litigation, by themselves. Further, a reading of the various provisions under the various chapters of the Act would reveal that the Act has made provisions which govern every facet that is required to achieve the stated objective.

14. The Chapter-1 provides the definitions under Section-2 and Section 2-A a deeming provision which came to be inserted by Act 35 of 1955 states that the dismissal of an individual workman shall be deemed to be an Industrial Dispute.

15. Chapter-2 provides for conciliation, appointment of conciliation officers, constitution of Courts of Enquiry, constitution of Labour Courts, Tribunals, National Tribunals and qualification for the purpose of selecting Presiding Officers and

Page 20 of 31

filling up of vacancies etc. Chapter-2B provides for a setting up of a Grievance Redressal Machinery.

16. Chapter-3 provides for the reference of disputes to the Boards, Courts or Tribunals by the appropriate Government and also voluntary reference of disputes of arbitration under provisions of Section 10-A. It is also interesting to note that Sub-Section 5 of Section 10-A specifically ousts the application of the provisions of the Arbitration Act, 1940 to Arbitration under the said section.

17. The Act also provides for the procedure, powers and duties of the various authorities under the Act. It also defines various offences and also provides for the penalties. Chapter-7 provides for miscellaneous aspects under the Act including vesting powers on the Courts/Tribunal to enforce the orders passed by the Court. Thus, not only is the Courts/Tribunal constituted under the Act is conferred with original jurisdiction but, additionally vested with the powers of an Executive Court. To state in a nutshell, the Act is a self contained Act irrespective of the nature of dispute and once the dispute answers the description of an Industrial Dispute, the provisions of the Industrial Disputes Act, 1947 become applicable. This conclusion, draws sustenance from a combined reading of the provisions of Section 2-B, 2-E and 2-F to mean a Conciliation Officer appointed under this Act, a conciliation proceeding to mean a

Page 21 of 31

proceeding held by a Conciliation Officer or Board under the Act and finally defines a Court to mean a Court of Inquiry constituted under the Act. Thus, the Act not only provides for the entire mechanism for addressing the issue of Industrial Dispute but the legislature has proceeded further and has specifically provided for the exclusion of the application of the Arbitration Act to disputes raised under the Industrial Disputes Act.

18. The learned counsel for the petitioner would also place reliance on the rulings of the Hon'ble Apex Court reported in 1983 LAB. I. C. 1694 in the case of Jai Bhagwan V. Management of the Ambala Central Co- operative Bank Ltd., wherein the Hon'ble Apex Court has held as follows:-

"Shri Rohatgi, learned counsel for the Respondent Bank, was unable to contend that there was even a remote compliance with the principles of natural justice. He was also unable to urge that the Industrial Tribunal had truly applied his mind to the case. He, however, argued that the appellant had a remedy against the order of termination of services by way of an appeal to the Board of Management and that his failure to pursue that remedy barred him from raising any Industrial dispute. He also attempted to connect the order of termination of services with the absence of the workman from the bank on August 13 and 14, 1974, on days when his signature was found in the attendance

Page 22 of 31

register. We see no substance in either of the submissions. Raising an industrial dispute is a well recognized and legitimate mode of redress available to a workman, which has achieved statutory recognition under the Industrial Disputes Act and we fail to see why the statute- recognised mode of redress should be denied to a workman because of the existence or availability of another remedy. Nor are we able to understand how an Industrial Tribunal to whom a dispute has been referred for adjudication can refuse to adjudicate upon it and surrender jurisdiction which it undoubtedly has to some other authority. While the Government may exercise their discretion in deciding whether to refer or not to refer a dispute for adjudication, the Tribunal to whom the dispute has been referred has no discretion to decide whether to adjudicate or not. Once a reference has been properly made to an Industrial Tribunal, the dispute has to be duly resolved by the Industrial Tribunal. Resolution of the dispute cannot be avoided by the Tribunal on the ground that the workman had failed to pursue some other remedy. The attempt of Shri Rohatgi to connect the order terminating the appellant's services with his absence from the bank on August 13 and 14, 1974 is an attempt made before us for the first time. At no earlier stage was the order of termination of services sought to be sustained on the basis of the absence of the workman from the bank on August 13 and 14, 1974. It cannot be done now."

Page 23 of 31

19. From the above it can be discerned that the full bench of the Hon'ble Apex Court has laid down two prepositions of law, one that a workmen cannot be driven to seek redress elsewhere because of the existence or availability of another remedy and raising an Industrial Dispute is a well recognized and legitimate mode of redress and is one which has achieved statutory recognition under the Industrial Disputes Act; secondly, no discretion is vested in the Industrial Tribunal to avoid resolution of the dispute once the reference is validly made.

20. Per contra, the learned counsel for the respondent has placed reliance on the catena of judgments to underscore the point of applicability of the provisions of Arbitration and Conciliation Act, 1996 in respect of proceedings pending before the Industrial Tribunal and would endeavour to sustain the order passed on I.A. No.1 whereby the Industrial Tribunal has stayed its own proceedings in order to enable the respondent to refer the matter to Arbitration.

21. He firstly relied on the ruling of the Hon'ble Apex Court in the case of Rashtriya Ispat Nigam Ltd. V. Verma Transport Co. reported in (2006) 7 SCC 275. In the said judgment the Hon'ble Apex Court was examining the scope of Section 8(1) of the Arbitration and Conciliation Act, 1996 and was pleased to hold that the objection regarding restriction to invoke Section 8(1) of the Arbitration and Conciliation Act, 1996 is up to the point of filing of the first

Page 24 of 31

statement on the substance of the dispute. It is seen that the issue was a matter arising out of a commercial contract relating to illegal termination of the contract. In the facts and circumstances and the law involved therein finding is rendered without reference to the provisions of the Industrial Disputes Act. In the second ruling reported in (2000) 4 SCC 539 in the case of P. Anand Gajapathi Raju and Others Vs. P.V.G. Raju (Dead) and Others, the Hon'ble Apex Court was pleased to hold that where the matter is subject matter of Arbitration agreement, the said subject matter is required to be adjudicated by arbitration and once the reference is made to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996. The proceedings in civil action stands disposed off and that there is no question of stay of pending conclusion of the arbitration. It is to be noted that the impugned order is contrary to the very ruling itself. It is not in dispute that the tribunal has no power to stay its own proceedings nor is it vested WITH the jurisdiction to refer the dispute to arbitration and on the contrary, in the light of the authoritative pronouncement of the Hon'ble Apex Court in the case of Jai Bhagwan V. Management of the Ambala Central Co- operative Bank Ltd., and Jai Bhagwan Vs State of Haryana and another, it is mandatory upon the Industrial Tribunal to hear and decide the reference. Yet again the reliance is placed on other ruling of the Hon'ble Apex Court i.e. in (2003) 6 SCC 503 in Hindustan Petroleum Corpn. Ltd. Vs. Pinkcity Midway Petroleums by the said

Page 25 of 31

ruling the Hon'ble Apex Court has held that once the existence of an Arbitration Clause brought to the notice of the civil court, it was mandatory upon the civil court to refer the dispute to Arbitration. The civil court has no jurisdiction to continue with the suit once the application under Section 8 of the Arbitration and Conciliation Act, 1996 has been filed. The Hon'ble Apex Court was dealing with the case arising out of Weights and Measures (Enforcement) Act, 1985 similar are the rulings reported in (2007) 3 SCC 686 in the case of Agri Gold Exims Ltd. Vs Sri. Lakshmi Knits & Wovens and Others. The said rulings have been rendered without reference to the bar proclaimed under the Industrial Disputes and law settled by the Hon'ble Apex Court with regard to the scope and jurisdiction of the Industrial Tribunal with regard to a validly made reference. Hence in the humble opinion of this court, are inapplicable to the case on hand.

22. The learned counsel for the respondent would place reliance on other ruling of the Hon'ble Apex Court reported in (2011) 5 SCC 532 in Booz Allean and Hamilton Inc. Vs. SBI Home Finance Limited and Others, where the Hon'ble Apex Court had the occasion to define the "Arbitrability" of dispute and it was pleased to hold that all disputes related to rights in rem are required to be adjudicated by the courts and public tribunals, being unsuited for (private) arbitration. It further held that right in personam can be adjudicated by the Arbitral Tribunal. It is useful to refer to the

Page 26 of 31

observations of the Hon'ble Apex Court at paragraph 34, 35 and 36. "34. The term

"arbitrability" has different meanings in different contexts. The three facets of arbitrability, relating to the jurisdiction of the Arbitral Tribunal, are as under: (i) Whether the disputes are capable of adjudication and settlement by arbitration?

That is, whether the disputes, having regard to their nature, could be resolved by a private forum chosen by the parties (the Arbitral Tribunal) or whether they would exclusively fall within the domain of public fora (courts). (ii) Whether the disputes are covered by the arbitration agreement? That is, whether the disputes are enumerated or described in the arbitration agreement as matters to be decided by arbitration or whether the disputes fall under the

"excepted matters" excluded from the purview of the arbitration agreement. (iii) Whether the parties have referred the disputes to arbitration? That is, whether the disputes fall under the scope of the submission to the Arbitral Tribunal, or whether they do not arise out of the statement of claim and the counterclaim filed before the Arbitral Tribunal. A dispute, even if it is capable of being decided by arbitration and falling within the scope of arbitration agreement, will not be "arbitrable" if it is not enumerated in the joint list of disputes referred to arbitration, or in the absence of such joint list of disputes, does not form part of the disputes raised in the pleadings before the Arbitral Tribunal. 35. The Arbitral Tribunals are private fora chosen voluntarily

Page 27 of 31

by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals which are public fora constituted under the laws of the country. Every civil or commercial dispute, either contractual or non- contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of the Arbitral Tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings are reserved by the legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for adjudication by public fora (courts and tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending, will refuse to refer the parties to arbitration, under Section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes. 36. The well-recognised examples of non- arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory

Page 28 of 31

protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes." [emphasis supplied by me].

23. From a reading of para 36 it can be safely inferred that even in respect of certain rights in personam like tenancy rights etc. the Hon'ble Apex Court has deemed it fit and necessary that they be decided by the specified courts. It is not in dispute that the arbitrary removal or dismissal of workmen from service or changing of service conditions is against public policy as envisioned by the legislature in the form of Industrial Disputes Act and other labour related enactments. Further more, if such an interpretation is accepted it would not only be contrary to the bar under the provisions of the Industrial Disputes act but would also amount to defeating the very objective and spirit of the Industrial Disputes Act which is not only special enactment but also a social legislation.

24. The learned counsel for the respondent would attempt to convince the court regarding the applicability and invocation of Section 8 of the Arbitration and Conciliation Act in respect of proceedings before the Industrial Tribunal. In this regard he would place the ruling of the Hon'ble Apex Court reported in 1963 Supplement (1) SCR 625 in the case of Engineering Mazdoor Sabha and Another Vs Hind Cycles Limited. That was a case where the parties had voluntarily referred the dispute to the arbitrator under

Page 29 of 31

the provisions of Section 10 (a) of the Industrial Disputes Act. In the said case the court was dealing with the issue of maintainability of the appeal by Special Leave by invoking the provisions of Article 136 as against an award by an Arbitrator passed under Section 10 (a) of the Industrial Disputes Act.

25. It is seen that the respondent has not called in question the reference made by the Government by invoking the provisions of Industrial Disputes Act and the order of reference has become final by the respondent accepting the same. Assuming for argument sake that the dispute between the parties was in fact arbitrable, the said right existed only till the date of passing of the order by the Government, referring the dispute to the Tribunal. Once the order of reference was made by the Government and in the light of the law laid down by the Hon'ble Apex Court as stated supra in Jai Bhagwan V. Management of the Ambala Central Co-operative Bank Ltd., the Industrial Tribunal has no scope to entertain a prayer under Section 8 of the Arbitration and Conciliation Act as it is mandated by the Hon'ble Apex Court that the Tribunal must pass an award either way resolving the dispute."

5.5 Even in the case of NTPC Ltd. (supra) though the standard of scrutiny to examine the non-arbitrability of a claim is prima-facie as held

Page 30 of 31

by the Supreme Court, it is open for this Court whether the assertion on arbitrability is bona-fide or not and where there is no doubt that the claim is not arbitrable, this Court ought not to entertain such a petition.

6. For the aforesaid reasons, the petition is dismissed.

(BIREN VAISHNAV, J)

ANKIT SHAH

Page 31 of 31