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Monday, February 24, 2014

Writ - jurisdiction -Sec.89 of C.P.C. - alternative disputes resolution out of court - Dispute between two private parties about the execution of contractual works - arbitration clause that"Twins and operator have agreed to appoint Managing Director of Andhra Pradesh Technology Services Ltd., Sri Suresh Chanda, I.A.S., to be the Adjudicator and in the event of his willingness to go out of adjudicatorship, a new adjudicator can be appointed by mutual agreement." - single judge dismissed the writ petition - DB by invoking sec. 89 of C.P.C. refer all the disputes which emanate from the tripartite agreement amongst the parties to the sole Arbitrator, Mr. Justice A. Gopal Reddy, a retired Judge of this Court, who will make and publish an Award within a period of five months from the date of entering upon the reference. = M/s. RAM Informatics Limited Having its office at 8-2-1/B/1, Srinagar Colony Road Punjagutta, Hyderabad Rep. by its Director P.S. Raman... Appellant CMS Computers Ltd., Having its office at CMS Lake Road Centre No.70, Lake Road, Kaycee Industrial Compound Bhandup West (Mumbai 400 078) Rep. by its Managing Director and another... Respondents =2014 (Feb.Part) judis.nic.in/judis_andhra/filename=10867

Writ - jurisdiction -Sec.89 of C.P.C. - alternative disputes resolution out of court - Dispute between two private parties about the execution of contractual works  - arbitration clause that"Twins and operator have agreed to appoint Managing Director of Andhra Pradesh Technology Services Ltd., Sri Suresh Chanda, I.A.S., to be the Adjudicator and in the event of his willingness to go out of adjudicatorship, a new adjudicator can be appointed by mutual agreement." - single judge dismissed the writ petition - DB of High court by invoking sec. 89 of C.P.C. refer all the disputes which emanate from the tripartite agreement amongst the parties to the sole Arbitrator, Mr. Justice A.Gopal Reddy, a retired Judge of this Court, who will make and publish an Award within a period of five months from the date of entering upon the reference. =

 The appellant before us filed the writ petition against CMS Computers
Limited, which is admittedly a private identity not having any instrumentality
of the State in any manner whatsoever within the Article 12 of the Constitution
of India, nor even in our view is the 'other authorities' within the meaning of
Article 226 of the Constitution of India.  Why we say so, there has been no
pleading as such in the affidavit filed in support of the writ petition before
the learned trial Judge.=
 We have gone through the impugned judgment and order of the learned trial
Judge.  We are in full agreement with His Lordship that the matter of this
nature cannot be decided by Writ Court.  
We would have ended the matter here dismissing the writ appeal, but we
think we will be failing to discharge our duty if we do not consider the
provisions of Section 89 of the Code of Civil Procedure (CPC), which have been
adopted by Rule 24 of the Writ Rules framed by this Court.
Before the introduction of Section 89 of CPC, there was no mechanism for
getting the disputes involved in pending litigation resolved outside the Court
after repealing Arbitration Act, 1940.  Of course, in the Arbitration Act, 1940
such provision was there, but in the present Act - the Arbitration and
Conciliation Act, 1996 there is no such provision.  
Section 89 of CPC had
supplemented and in true sense has restored the provisions of Section 21 of the
Arbitration Act, 1940.  
Under the circumstances, we think that Section 89 of CPC
shall be invoked in this case.  
Section 89 of CPC provides as follows:
"89. Settlement of disputes outside the Court.- 
(1) Where it appears to the
Court that there exist elements of a settlement which may be acceptable to the
parties, the Court shall formulate the terms of settlement and give them to the
parties for their observations and after receiving the observations of the
parties, the court may reformulate the terms of a possible settlement and refer
the same for -
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
   (2) Where a dispute has been referred -
(a) for arbitration or conciliation, the provisions of the Arbitration and
Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for
arbitration or conciliation were referred for settlement under the provisions of
that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in
accordance with the provisions of sub-section (1) of section 20 of the Legal
Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act
shall apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a suitable
institution or person and such institution or person shall be deemed to be a Lok
Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of
1987) shall apply as if the dispute were referred to a Lok Adalat under the
provisions of that Act;
(d) for mediation, the Court shall effect a compromise between the parties and
shall follow such procedure as may be prescribed."

9.      Taking note of the provision, we find there is a clause, being clause 8.4,
in the tripartite agreement, which is set out hereunder:
"Twins and operator have agreed to appoint Managing Director of Andhra Pradesh
Technology Services Ltd., Sri Suresh Chanda, I.A.S., to be the Adjudicator and
in the event of his willingness to go out of adjudicatorship, a new adjudicator
can be appointed by mutual agreement." 

10.     It appears on a close reading of the clause that all the parties have
essentially agreed for adjudication of the matter by the adjudicator, named Sri
Suresh Chanda, I.A.S, Managing Director of Andhra Pradesh Technology Services  
Limited.  According to us, the aforesaid provision is nothing but initiation of
the parties of getting the matter resolved outside Court by alternative
mechanism.  
However the said Clause is not clearly understandable as its nature
or character of alternative disputes resolution mechanism.  
Section 89 of  CPC
provides for various options in absence of arbitration agreement, and the Court
can on agreement of the parties creates amongst other an arbitration mechanism.
When we noticed the intention of the parties for adjudication of the disputes
outside the Court, we think that the option of the arbitration would be best one
having regard to the nature of the disputes involved.  We are happy to note that
all the parties have agreed to get their disputes resolved by arbitration
mechanism.  
11.     Under the circumstances, we refer all the disputes which emanate from the
tripartite agreement amongst the parties to the sole Arbitrator, Mr. Justice A.
Gopal Reddy, a retired Judge of this Court, who will make and publish an Award
within a period of five months from the date of entering upon the reference. 
The writ appeal is accordingly disposed of.  There will be no order as to costs.

2014 (Feb.Part) judis.nic.in/judis_andhra/filename=10867


THE HONOURABLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HONOURABLE SRI JUSTICE SANJAY KUMAR                    

Writ Appeal No.151 of 2014

07-2-2014

M/s. RAM Informatics Limited Having its office at 8-2-1/B/1, Srinagar Colony
Road  Punjagutta, Hyderabad Rep. by its Director P.S. Raman... Appellant

CMS Computers Ltd.,   Having its office at CMS Lake Road Centre No.70, Lake
Road, Kaycee Industrial Compound Bhandup West (Mumbai 400 078) Rep. by its  
Managing Director and another... Respondents

!COUNSEL FOR APPEALLANT: Sri B. Chandrasen Reddy      

COUNSEL FOR RESPONDENT NO.1  : Sri K. Gopal      
 COUNSEL FOR RESPONDENT NO.2  : Government Pleader for      
                                General Administration Dept.

<GIST:

>HEAD NOTE:  

?CITATIONS: (2005) 4 SCC 649

THE HON'BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA          
 AND
THE HON'BLE SRI JUSTICE SANJAY KUMAR      

WRIT APPEAL NO.151 OF 2014    

JUDGMENT: (per the Hon'ble the Chief Justice Sri Kalyan Jyoti Sengupta)

        This writ appeal is filed against the judgment and order of the learned
trial Judge, dt.12.12.2013 by which the writ petition has been dismissed.
2.      All the parties are present before us.  We admit the appeal and decide the
matter finally after consent of all the parties.
3.      The appellant before us filed the writ petition against CMS Computers
Limited, which is admittedly a private identity not having any instrumentality
of the State in any manner whatsoever within the Article 12 of the Constitution
of India, nor even in our view is the 'other authorities' within the meaning of
Article 226 of the Constitution of India.  Why we say so, there has been no
pleading as such in the affidavit filed in support of the writ petition before
the learned trial Judge.
4.      Learned counsel for the appellant/petitioner submits that the observations
of the learned trial Judge are not correct and the learned trial Judge should
have entertained the writ petition and granted the relief.
5.      Learned counsel for the respondents support the judgment and submit
jointly that highly disputed questions of fact are mentioned in the writ
petition and these disputes emanate from a contractual agreement arrived at
between the parties to execute the works in private law.
6.      We have gone through the impugned judgment and order of the learned trial
Judge.  We are in full agreement with His Lordship that the matter of this
nature cannot be decided by Writ Court.
We are also of the view that even if
for arguments sake, CMS Computers Limited is assumed 'other authority' within
the meaning of Article 226 of the Constitution of India, nature of the
transaction between the appellant on one hand and CMC Computers Limited and
Government of Andhra Pradesh on the other hand is absolutely that of commercial
and private character.  According to us, 'other authorities' as defined under
Article 226 of the Constitution of India are amenable to Writ jurisdiction only
when it discharges statutory duty of public character.  In this case the
transaction is not in relation to the duty of public character to be discharged.
Therefore, the decision of the Supreme Court relied on by the learned counsel
for the appellant in Zee Telefilms Ltd. and another v. Union of India and
others1 is not applicable, as has been correctly observed by the learned trial
Judge.  We would have ended the matter here dismissing the writ appeal, but we
think we will be failing to discharge our duty if we do not consider the
provisions of Section 89 of the Code of Civil Procedure (CPC), which have been
adopted by Rule 24 of the Writ Rules framed by this Court.
7.      The confidence and faith of the public litigant in the judiciary is
preserved, in our opinion the moment the litigant gets justice as early as
possible, whether by the regular Court or by alternative method.  After all, the
administration of justice as a whole has been rested with the judiciary and the
judiciary is to take up such measure for which the people will get justice
without any hassles and without being entangled unnecessarily by procedural
formalities.
8.      Before the introduction of Section 89 of CPC, there was no mechanism for
getting the disputes involved in pending litigation resolved outside the Court
after repealing Arbitration Act, 1940.  Of course, in the Arbitration Act, 1940
such provision was there, but in the present Act - the Arbitration and
Conciliation Act, 1996 there is no such provision.  Section 89 of CPC had
supplemented and in true sense has restored the provisions of Section 21 of the
Arbitration Act, 1940.  Under the circumstances, we think that Section 89 of CPC
shall be invoked in this case.  Section 89 of CPC provides as follows:
"89. Settlement of disputes outside the Court.- 
(1) Where it appears to the
Court that there exist elements of a settlement which may be acceptable to the
parties, the Court shall formulate the terms of settlement and give them to the
parties for their observations and after receiving the observations of the
parties, the court may reformulate the terms of a possible settlement and refer
the same for -
(a) arbitration;
(b) conciliation;
(c) judicial settlement including settlement through Lok Adalat; or
(d) mediation.
   (2) Where a dispute has been referred -
(a) for arbitration or conciliation, the provisions of the Arbitration and
Conciliation Act, 1996 (26 of 1996) shall apply as if the proceedings for
arbitration or conciliation were referred for settlement under the provisions of
that Act;
(b) to Lok Adalat, the Court shall refer the same to the Lok Adalat in
accordance with the provisions of sub-section (1) of section 20 of the Legal
Services Authority Act, 1987 (39 of 1987) and all other provisions of that Act
shall apply in respect of the dispute so referred to the Lok Adalat;
(c) for judicial settlement, the Court shall refer the same to a suitable
institution or person and such institution or person shall be deemed to be a Lok
Adalat and all the provisions of the Legal Services Authority Act, 1987 (39 of
1987) shall apply as if the dispute were referred to a Lok Adalat under the
provisions of that Act;
(d) for mediation, the Court shall effect a compromise between the parties and
shall follow such procedure as may be prescribed."

9.      Taking note of the provision, we find there is a clause, being clause 8.4,
in the tripartite agreement, which is set out hereunder:
"Twins and operator have agreed to appoint Managing Director of Andhra Pradesh
Technology Services Ltd., Sri Suresh Chanda, I.A.S., to be the Adjudicator and
in the event of his willingness to go out of adjudicatorship, a new adjudicator
can be appointed by mutual agreement." 

10.     It appears on a close reading of the clause that all the parties have
essentially agreed for adjudication of the matter by the adjudicator, named Sri
Suresh Chanda, I.A.S, Managing Director of Andhra Pradesh Technology Services
Limited.  According to us, the aforesaid provision is nothing but initiation of
the parties of getting the matter resolved outside Court by alternative
mechanism.  However the said Clause is not clearly understandable as its nature
or character of alternative disputes resolution mechanism.  Section 89 of  CPC
provides for various options in absence of arbitration agreement, and the Court
can on agreement of the parties creates amongst other an arbitration mechanism.
When we noticed the intention of the parties for adjudication of the disputes
outside the Court, we think that the option of the arbitration would be best one
having regard to the nature of the disputes involved.  We are happy to note that
all the parties have agreed to get their disputes resolved by arbitration
mechanism.
11.     Under the circumstances, we refer all the disputes which emanate from the
tripartite agreement amongst the parties to the sole Arbitrator, Mr. Justice A.
Gopal Reddy, a retired Judge of this Court, who will make and publish an Award
within a period of five months from the date of entering upon the reference.
12.     The learned Arbitrator will fix his own remuneration and also costs and
expenses of the arbitration proceedings upon deliberation and consultation with
the parties.
13.     The writ appeal is accordingly disposed of.  There will be no order as to
costs.
14.     Consequently, miscellaneous petitions pending, if any, shall stand closed.
________________________  
K.J.SENGUPTA, CJ
_______________________  
SANJAY KUMAR, J      
7.2.2014

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