SATYENDRA NATH MITRA Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS is an application for stay of a suit under Section 34 of the Indian Arbitration Act. The suit sought to be stayed has been instituted by the Respondent against the Union of India and one. Uma Sankar, General Manager of Calcutta Telephones at the material time. The cause of action against the Union of India as pleaded in the plaint is for breach of contract in wrongfully disconnecting the telephone service for a certain period of time, to wit, between November 15,1959 to December 3, 1959. The plaintiff respondent is a solicitor by profession, and by reason of the stoppage of the telephone service claims to have suffered damages assessed at Rs. 10,000/ -. The cause of action against the defendant Uma Sankar as pleaded in the plaint is also for damages. It is alleged, that by reason of the wrongful conduct and/Or negligence of Uma Sankar the General Manager, first, in disconnecting the telephone line and, second in not restoring connection till December 3, 1959, the respondent has been lowered in the estimation of the public generally and his reputation as a solicitor has been injured and he has been discredited to his clients, friends and relatives. Damages assessed at Rs. 25,000/ - has been claimed against the defendant Uma Sankar. Mr. A. M. Pal, the learned counsel appearing for the respondent, contended that his client's claim for damages as made in the plaint as against Uma Sankar is a claim in tort, though it arises out of the contract between the Union of India and the respondent. The claim against Uma Sankar ft made in the alternative in case it is held that the claim against the Union of India cannot be sustained in law. The respondent clearly had in view Clause 3 of the terms and conditions of the contract to he notice later.

(2.) THE respondent is a subscriber of the telephone No. 55 -4139 and had executed a telephone hiring contract in respect to that telephone. The contract is signed on behalf of the President of the Indian Union by one S. N. Chaudhury and not the defendant Uma Sankar. The terms and conditions of the contract are set out in the schedule annexed to the contract. Reference may be made to certain terms hereunder stated :

(3.) COMING now to the suit as against the Union of India. It is conceded by Mr. Pal that the claim is for breach of contract and the dispute is covered by the arbitration clause. Mr. Pal however contends that even though the dispute is covered by the arbitration clause the Court has a discretion in the matter and in the exercise of that discretion I should not grant a stay. The fact relied on by Mr. Pal is that even though the notice of suit was served on the Government as far back as December 24, 1959, the Government did not take any steps to refer the dispute to arbitration until November 29, 1960 when the plaintiff was compelled to institute this suit. This fact bow -ever has no relevance in the exercise of the Court's discretion in the matter of stay under Section 34. Law does riot impose an obligation on a party to refer the dispute to arbitration. All that is necessary is that after the suit is instituted he must be ready and willing to go to arbitration in order that he may apply for stay of the suit. Application for stay has to be made after the institution of the suit and the Statute gives the defendant the right to make an application for stay before taking any step in the proceeding. In. the instant case no step has been taken except filing the Warrant of Attorney. Filing of a warrant of Attorney is not in law taking a step in the proceeding. It is next argued that the arbitrator named is the Director General, Posts and Telegraphs who is an employee of the defendant Union. The Director General as such employee of the Union is bound to be biased in favour of the Union. I do not agree that a Government official acting in a judicial capacity will be biased in favour of the Government merely because he is a Government employee. I have seen in my experience awards having been made against the Government by Government employees in a number of arbitrations between the Government and citizens in which the Government servant was an arbitrator. Mr. Sen cited a decision of the Bombay High Court in the Case of Central Government of India v. Chottalal Chhaganlal, AIR 1949 Bom 359 in which the point raised by Mr. Pal was taken. It was held that the Director General, Posts and Telegraphs cannot be said to be biassed but can very well be relied on to exercise his independent judgment and decide the dispute fairly and impartially. With, that view of the Bombay High Court I respectfully agree.