Motorola India Private Ltd. v. Bharat Sanchar Nigam Ltd. and Chief General Manager, Kerala Telecom Circle, BSNL

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE TUESDAY, THE 27TH APRIL 2010 / 7TH VAISAKHA 1932 RP.No. 602 of 2009() -------------------AGAINST THE JUDGEMENT/ORDER IN AR.44/2008 .................... REVIEW PETITIONER(S)/PETITIONER: ---------------------- M/S MOTOROLA INDIA PRIVATE LTD., A CMPANY INCORPORATED UNDER THE COMPANIES ACT 1956, AND HAVING ITS OFFICE AT MOTOROLA EXCELLENCE CENTRE 415/2, SECTOR 14, MEHARAULI GURGAN ROAD, GURGAN 122 001, (HARYANA). BY ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.ANIL D. NAIR SRI.NITHIN GEORGE ## RESPONDENT(S)/RESPONDENTS: --------------- 1. BHARATH SANCHAR NIGAM LTD., A COMPANY INCORPORATED UNDER THE COMPANIES ACT,1956, AND HAVING ITS OFFICE AT STATESMAN HOUSE,CANNAUGHT CIRCUS NEW DELHI-01. REPRESENTED BY THE MANAGING DIRECTOR 2. CHIEF GENERAL MANAGER KERALA TELECOM CIRCLE, BHARATH SANCHAR NIGAM LTD., HAVING ITS OFFICE AT RTP BUILDING, LUKES LANE, PULIMMODU, THIRUVANANTHAPURAM-1, KERALA. ADV. SRI.P.VIJAYAKUMAR, SC, BSNL THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 27/04/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: ## **PIUS C. KURIAKOSE, J.** ------------------------------------------ RP. No. 602 of 2009 in A.R. No. 44 of 2008 ------------------------------------------------Dated this the 27[th] day of April, 2010 ## **O R D E R** The petitioner in AR. No. 44 of 2008 seeks review of my order dated 24-4-2009 dismissing the AR with certain observations, under Order 47 read with Section 114 of the Code of Civil Procedure on various grounds. Inter alia it is urged that the order sought to be reviewed suffers from material error apparent on the face of the record as it failed to consider or appreciate the provisions of the Act which mandates that an arbitrator has to be neutral and impartial. It is urged that this court failed consider that it will be impossible for Sri.N.Haribabu, the appointed arbitrator to adjudicate the disputes referred to him for arbitration impartially since his superior officers have already dealt with the disputes between the parties. It is urged that this Court failed to consider that in the facts and circumstances attending in the present case, whether the purpose of the RP. 602/09 - 2 - arbitration i.e., having a fair and impartial adjudication of the disputes would be defeated and rendered meaningless if Sri.N.Haribabu, the named arbitrator or for that matter any other employee of the first respondent is to adjudicate on the disputes. It is urged that this court did not take into account the terms of the arbitration agreement which provides that in the event the CGM, Kerala Telecom Circle, BSNL or its equivalent officer is unwilling to act as an arbitrator on account of likelihood of having dealt with the matter, the arbitrator to be appointed should be a neutral party. It is urged that the observation in this Court's order that the petitioner does not contend that Sri.Haribabu does not possess the qualification required to arbitrate upon the disputes and that the petitioner “does not specifically challenge the integrity of Mr.N.Haribabu” is not correct. It is urged that during the course of the submissions the counsel for the petitioner pointed out that Sri.Haribabu cannot under the circumstances of the case, be a neutral or RP. 602/09 - 3 - impartial arbitrator and hence his integrity as an arbitrator was under challenge although the petitioner had no basis to challenge his integrity in terms of dishonesty. It is clarified that though Sri.Haribabu's integrity as an individual had not been questioned and though Sri.Haribabu's integrity in the sense of his honesty was completely irrelevant since Sri.Haribabu is admittedly an employee of the first respondent he is responsible to respondent No.2. Hence it is beyond anybody's imagination that Sri.Haribabu can take a decision which is detrimental to the interest of the first respondent or the second respondent. Since the case involves very heavy stakes if Sri. Haribabu gave an award in favour of the petitioner, in all likelihood, a vigilance case would follow against him and being apprehensive of such a vigilance case, Sri. Haribabu will not pass an award in favour of the petitioner. 2. It is urged that this Court failed to consider that the arbitrator failed to provide a statement under Section 12(1) RP. 602/09 - 4 - or Section 12(2) of the Act as to lack of independence and/or impartiality. Hence there could be no question of Haribabu continuing as an arbitrator. It is submitted there is some relevance for the fact that Sri.Haribabu himself has never asserted, even otherwise, let alone demonstrated that he is independent of the parties to the arbitration. 3. It is urged that the order is bad since it did not consider that the arbitrator has not charged any fees for the arbitration which will show that he is doing arbitration work as part of his duty as an official of BSNL. It is urged that the action of the arbitrator in conducting the arbitration in Cochin as desired by the second respondent contrary to the terms of the arbitration clause in the agreement also showed that the arbitrator was not independent and the order is bad since this aspect is not considered in the order. 4. It is urged that the order under review suffers from error apparent on the face of the record since the judgment of the Supreme Court in (2008) 3 Arb. L.R. 531 is RP. 602/09 - 5 - misconstrued to be not applicable to the facts of the present case. It is urged that in terms of the judgment of the Supreme Court in the above case Sri. Haribabu's mandate stood automatically terminated forthwith and this aspect of the matter is not considered by this Court in the order under review. 5. It is urged that the order under review is bad since it did not specifically consider the decision of the Delhi High Court in Alcove Industries Ltd. v.Oriental Structural Engineers Ltd., 2008(1) Arb. LR 393 (Delhi). 6. It is urged that the order under review is bad because the judgment of the Gauhati High Court in State of Arunachal Pradesh v.Subhash Projects and Marketing Ltd. and another, 2007(1) Arb. LR 564 (Gau) and the judgment of the Supreme Court in Bihar State Mineral Development Corporation v. Encon Builders (I) (P) Ltd., (2003) 7 SCC 418 were not considered. 7. It is urged that the order under review is bad RP. 602/09 - 6 - because this court misconstrued certain submissions made by the learned counsel for the petitioner regarding the implications of the judgment of the Supreme Court wherein that court approved the appointment of Justice K.T.Thomas by this court in the previous AR. The order under review is bad because there is an observation by this court that the petitioner did not respond to the contention of the respondents that Mr. Haribabu is a Class-I Officer of the Telecom Department of the Government of India. It is urged that the said observation is incorrect. It is pointed out by the petitioner that even assuming Mr.Haribabu was on deputation he was still receiving his salary from respondent No.1 and was working under the supervision of respondent No.2. It is urged that the order under review is bad because this court observed that only upcountry villagers can be afforded protection against invalid and illegal contractual clauses. 8. Very extensive submissions were addressed before RP. 602/09 - 7 - us by Sri.Ciccu Muhopadyaya, learned counsel for the review petitioner and all those submissions were refuted by Sri.P.Vijayakumar, learned counsel for BSNL. Mr. Ciccu Muhopadyaya's submissions were based on the various grounds raised in the memorandum of review petition and in support of those submissions he placed reliance on a large number of decisions such as Ranjit Thakur v. Union of India, (1987) 4 SCC 611, Bihar State Mineral Dev.Corpn. v. Encon Builders (I) (P) Ltd., (2003)7 SCC 418, V.Raghunadha Rao v. State of A.P. (1988 (1) ALT 461, LIC of India and another v. Consumer Education & Research Centre and others, (1995) 5 SCC 481, Gas Authority of India Ltd. and another v. Keti Construction (I) Ltd. and another, (2007) 5 SCC 38, Indian Oil Corporation Ltd. and others v. Raja Transport (P) Ltd., 2009(3) Arb. L.R. 354 (SC), Board of Control for Cricket in India and another v. Netaji Cricket Club and others, (2005) 4 SCC 741, Meera Bhanja v. Nirmala Kumari Choudhury, (1995) 1 SCC 170. RP. 602/09 - 8 - Mr. P.Vijayakumar resisting the submissions made by Sri.Ciccu Muhopadyaya also relied on a number of decisions and among other decisions he relied on the judgment of the Supreme Court in Meera Bhanja v. Nirmala Kumari Choudhury, (1995) 1 SCC 170, Indian Oil Corporation Ltd. and others v. Raja Transport (P) Ltd., 2009(3) Arb. L.R. 354 (SC). Mr.Vijayakumar referred to clause (2) of Section 14 and submitted that this is a case where an arbitrator is already appointed and the petitioner filed an application before the same arbitrator seeking a declaration that the arbitrator's mandate is terminated and that the arbitrator shall withdraw from his office. That application was dismissed by the arbitrator. That being the situation, the remedy of the aggrieved party is not to file a fresh arbitration request but at best is to invoke Section 14(2) and apply to the court to decide on the termination or otherwise of the mandate. Mr. Vijayakumar hastened to add that in this particular case termination sought for by RP. 602/09 - 9 - Mr.Ciccu Muhopadyaya to move the court to apply under Section 14(2) to settle the controversy as to whether the arbitrator's mandate has been terminated should not be granted since such a ground is not raised in the RP and such an argument was also never raised before this Court in the AR. 9. I have very anxiously considered the rival submissions addressed at the Bar in the light of the various decisions cited before me by the learned counsel on both sides. It is settled by a line of decisions including the judgment of the Supreme Court in Thungabhadra Industries Ltd. v. The Govt. of A.P. - AIR 1964 SC 1372 that a review is, by no means an appeal in disguise, whereby an erroneous decision is reheard and corrected, but lies only for correcting patent errors. Reference will be made in this context on the judgment of the Supreme Court in Dr.Mohd Yasin v. University of Kashmir, Srinagar and others – AIR 1974 SC 2341 wherein the Supreme Court has clearly laid RP. 602/09 - 10 - down that review is maintainable only if an apparent error or a mistake on the face of the judgment is made out, or that it should be shown that the new pleas are based on any matter, which could not, despite due diligence, be discovered or produced earlier at the appropriate stage. Later the Supreme Court has struck a note of caution against free entertainment of applications for review by its judgment in Sow Chandra Kante and another v. Sheikh Habib – 1975 (1) SCC 674. It is held that once an order has been passed by a court, a review thereof must be subject to the rules of the game, which cannot be lightly entertained, and a reluctant resort to it is proper, only where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility. The Supreme Court has also held by judgment in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi – AIR 1980 SC 674 that if the view adopted by the court in the original judgment is a possible view, having regard to what the record states, it is difficult RP. 602/09 - 11 - to hold that there is an error apparent on the fact of the record. I do not think that my earlier order which is sought to be reviewed suffers from infirmities as envisaged by Order 47 Rule 1 of the Code of Civil Procedure. It may be true that the review petitioner has reasons to be aggrieved by my order, but his remedy lies not under Order 47 Rule 1. Neither the grounds raised in the memorandum of review nor the very persuasive submissions of Mr.Ciccu Muhopadyaya appeal to the jurisdiction of this court under Order 47 rule 1 which is well delineated by Order 47 itself. As for the last submission whether the remedy of the petitioner is to apply to the court under clause (2) of Section 14 for a decision on the question as to whether the mandate of the arbitrator has terminated for the reasons stated by the petitioner, I am of the view that I will not be justified in granting the leave sought for by Sri.Ciccu Muhopadyaya to make an application to the court which going by the statutory definition under Section 2(e) is the RP. 602/09 - 12 - principal civil court of original jurisdiction in the as this High Court does not have an original jurisdiction. But perhaps Section 42 of the Arbitration and Conciliation Act, 1996 also may be applicable. 10. Whatever, that be I am not inclined to grant any leave to the petitioner for filing application under Section 14 (2). At the same time, if the petitioner is entitled in law to make such an application, this order will not foreclose the same. The review petition is dismissed. No costs. ## **PIUS C.KURIAKOSE, JUDGE** ## **ksv/-**