R.K. Patra, J.
1. By the aforesaid twin petitions under Articles 226 and 227 of the Constitution of India, the petitioners challenge the constitutional validity of Section 7B of the Indian 'I elegraph Act, 1885 (hereinafter referred to as 'the Act') on the ground that it is hit by Article 14 of the Constitution. In the first petition, i.e. O.J.C. No. 2608 of 1993, the petitioner seeks the quashing of the award made by the arbitrator under Annexure 7. Although similar prayer has been made in O.J.C. No. 61.79 of 1995 to quash the award, the same has not been appended to the writ petition. As identical and similar points were raised in both the petitions, they were heard together and are disposed of by this judgment.
2. The facts in O.J.C. No. 2608 of 1993 are briefly indicated. The petitioner is a practising advocate at Cuttack and is a subscriber of Telephone No. 22537 Ck. Following the disputes raised by him over the bills submitted by the department in respect of the telephone in question, this Court in O.J.C. No. 1402 of 1991 by order dated 10-4-1992 required the Union of India to appoint an arbitrator to decide the disputes under Section 7B of the Act. The arbitrator gave his award dated 27-7-1992 at Annexure-7. O.J.C. 6879 of 1995 has been filed by the petitioner because of disputes which arose on account of disconnection of Telephone No. 21184 Ck.
3. The first case, i.e., O.J.C. No. 2608 of 1993 along with O.J.C. No. 4149 of 1989 was once heard by the Full Bench to decide the point as to whether the award rendered by the arbitrator under Section 7B of the Act is invalid in absence of reasons in support of the same. The Full Bench by order dated 15-9-1994 declined to express any opinion in the matter by observing as follows :
'We find that the awards do contain reasons and, therefore, it will not be proper on our part to decide in these cases the question as to whether an award which does not contain reasons can be said to be a good award. These matters will now be placed before the Division Bench for disposal in accordance with law.'
This is how the matter has come up for disposal before this Bench.
4. Shri Jena, learned counsel for the petitioner in O.J.C. No. 2608 of 1993, mainly urged that Section 7B of the Act is ultra vires Article 14 of the Constitution on the following grounds:
(a) There is no provision of appeal or revision provided in the Act to challenge the award;
(b) Petty subordinate officers are being appointed by the Central Government to act as arbitrator. Even at times the Central Government does not exercise the power to appoint an arbitrator and instead the General Manager (Telephones) appoints arbitrator; and
(c) No guidelines are indicated as regards the procedure for adjudication of disputes by the arbitrator. There is no provision requiring the arbitrator to record reasons in support of the award.
Shri Das, learned counsel for the petitioner in O.J.C. No. 6879 of 1995, besides reiterating the aforesaid contentions made an additional submission that Section 7B of the Act destroys the basic structure of the Constitution as laid down by the Supreme Court in Kesavananda Bharativ. State of Kerala, AIR 1973 SC 1461.
Learned counsel appearing for the opposite parties submitted that the impugned provision does not suffer from any vice and the awards rendered by the arbitrator do not suffer from any error of law apparent on the face of the record and, as such, they are not available to be questioned by the petitioners.
5. The contention of Shri Jena that Section 7B of the Act is ultra vires Article 14 of the Constitution in absence of any provision by way of appeal or revision to challenge the award need not detain us in view of the decision of the Supreme Court in M/s. Babubhai & Co. v. State of Gujarat, AIR 1985 SC 613. In that case Section 54 of the Bombay Town Planning Act and Rule 47 of the Bombay Town Planning Rules were challenged on the ground that they are unreasonable and/or unguided and arbitrary in absence of any provision by way of appeal or revision to challenge the adverse order. In paragraphs 6 and 7 of the judgment, the Court observed as follows:
'It cannot be disputed that the absence of a provision for a corrective machinery by way of appeal or revision to a superior authority to rectify an adverse order passed by an authority or body on whom the power is conferred may indicate that the power so conferred is unreasonable or arbitrary but it is obvious that providing such corrective machinery is only one of the several ways in which the power could be checked or controlled and its absence will be one of the factors to be considered along with several others before coming to the conclusion that the power so conferred in unreasonable or arbitrary; in other words mere absence of a corrective machinery by way of appeal or revision by itself would not make the power unreasonable or arbitrary, much less would render the provision invalid. Regard will have to be had to several factors, such as, on whom the power is conferred, whether on a high official or a petty officer, what is the nature of the power -- whether the exercise thereof depends upon the subjective satisfaction of the authority or body on whom it is conferred or is to be exercised objectively by reference to some existing facts or tests, whether or not it is a quasi-judicial power requiring that authority or body to observe principles of natural justice and make a speaking order etc.; the last mentioned factor particularly ensures application of mind on the part of the authority or body only to pertinent or germane materials on the record excluding the extraneous and irrelevant and also subjects the order of the authority or body to a judicial review under the writ jurisdiction of the Court on grounds of perversity, extraneous influence, mala fides and other blatant infirmities. Moreover all these facts will have to be considered in the light of the scheme of the enactment and the purpose intended to be achieved by the concerned provision. If on an examination of the scheme of the enactment as also the purpose of the concerned provision it is found that the power to decide or do a particular thing is conferred on a very minor or petty officer, that the exercise thereof by him depends on his subjective satisfaction, that he is expected to exercise the power administratively without any obligation to make a speaking order then, of course, the absence of a corrective machinery will render the provision conferring such absolute and unfettered power invalid. But it is the cumulative, effect of all these factors that will render the provision unreasonable or arbitrary and liable to be struck down. In three of the decisions referred to by counsel where the concerned provision was struck down the cumulative effect of several factors that were present in each was taken into consideration by the Court, while in C. R. H. Readymoney's case (AIR 1956 Bom 304) the provision was held to be valid.
In this behalf we might usefully refer to a decision of this Court in Organo Chemical Industries v. Union of India(1980) 1 SCR 61: AIR 1979 SC 1803. In this case Section 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 which conferred power upon the Central Provident Fund Commissioner to levy and recover punitive damages from a defaulting employer was challenged on the ground that within the limit of 100% of the defaulted amount it conferred naked and unguided power on the Commissioner to impose any quantum of damages as he fancied, that no reasons were required to be given by him for such imposition and that no appellate or revisional review was prescribed against any adverse order that may be made by him and as such the section was violative of Article 14 of the Constitution. Negativing the contention this Court took the view that the power under the section had been conferred upon one of the highest officials of the Government, that the power to impose damages on a party after hearing him was a quasi-judicial one, that observance of requirements of natural justice was implicit in such jurisdiction, that one desideratum thereof was spelling out of the reasons for the order to be made, that giving of reasons ensured rational action on the part of the officer because reasons implied relevant reasons necessitating the application of mind on the part of the officer only to pertinent and germane material on record and that once reasons were set out the order readily exposed itself to the writ jurisdiction of the Court so that perversity, extraneous influence, mala fides and other blatant infirmities got caught and corrected. Under such circumstances this Court held that the needs of the factual situation and the legal milieu were such that the absence of appellate review in no way militated against the justice and reasonableness of the provision and that the argument of arbitrariness on the score was untenable.'
6. We may state here that Section 25N of the Industrial Disputes Act, 1947 was challenged before the Supreme Court on similar ground, viz. there is no provision for appeal or revision against the order made by the appropriate Government or authority refusing to grant permission to retrench under Sub-Section (2) of Section 25N in Workmen of Meenakshi Mills Ltd. v. Meenakshi Mills Ltd., (1992) 1 SCR 409 : (1992 AIR SCW 1378). The Constitution Bench rejected the said contention after quoting with approval the relevant paragraph of the judgment in the case of Babubhai & Co. (AIR 1985 SC 613) (supra) which has already been mentioned in paragraph 5 of this judgment. The Constitution Bench concluded as follows:
'In the instant case the order under Sub-Section (2) granting or refusing permission for retrenchment is to be passed either by the appropriate Government or authority specified by the appropriate Government, and the said order is required to be a speaking order based on objective consideration of relevant facts after following the principles of natural justice. In the circumstances the absence of a provision for appeal or revision is not of much consequence especially when it is open to an aggrieved party to invoke the jurisdiction of the High Court under Article 226 of the Constitution ...... .As pointed out in Mohinder Singh Gill v. Chief Election Commissioner, New Delhi, (1978) 2 SCR 272 : (AIR 1978 SC 851):
'Independently of natural justice, judicial review extends to an examination of the order as to its being perverse, irrational, bereft of application of the mind or without any evidently backing.
The remedy of judicial review under Article 226 is, in our view, an adequate protection against arbitrary action in the matter of exercise of power by the appropriate Government or authority under Sub-section (2) of Section 25N of the Act. ......'
In view of the aforesaid legal position, Section 7B of the Act, cannot be voided merely because no corrective machinery by way of appeal or revision against the award made thereunder is provided under the Act.
7. We may now quote Section 7B of the Act:
'7B, 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.'
The aforesaid Sub-section (2) makes the award of the arbitrator conclusive between the parties to the dispute. In Nityananda Sahu v. Post-Master General, Orissa, Bhubanes-war, AIR 1977 Orissa 48, it has been held by this Court that the Arbitration Act, 1940 does not apply to arbitration contemplated under Section 7B of the Act. In that case it was observed as follows (Para 7):
'...... .Sub-section (2) of Section 7B of the Act makes the award of the Arbitrator conclusive between the parties to the dispute and makes it immune from challenge in any Court. This provision rules out the application of the Arbitration Act. Section 46 of the Arbitration Act shall apply provided it is not inconsistent with the scheme of the statute providing statutory arbitration. Under the Arbitration Act, the Court has power to modify an award, to remit an award or to make the award a rule of the Court. It has also power to set aside an award. In view of the clear terms of Section 7B of the Act, the general scheme of the Arbitration Act is not applicable to statutory arbitration under the Act.'
The case of Nityananda Sahu (supra) decided by a learned Single Judge has been approved by a Division Bench of this Court in O.J.C. No. 1704 of 1987 (Messrs Hotel Oberoi v. Union of India) decided on 11-3-1993.
8. An arbitration may be voluntary, i.e., under an arbitration agreement entered into between the parties or it may be statutory, i.e., where there is no agreement or contract between the parties but they have to make a reference under the provisions of some enactment like Section 7B of the Act. Arbitration having been provided under Section 7B of the Act, it is thus statutory, Section 46 of the Arbitration Act, 1940 provides that 'the Arbitration Act shall apply provided it is not inconsistent with the scheme of the statute providing statutory arbitration. Having regard to the provision of Section 7B of the Act, we are of the opinion that the general scheme of the Arbitration Act is not applicable to statutory arbitration contemplated under Section 7B of the Act. No doubt, Sub-section (2) of Section 7B of the Act states that 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'. Although it bars the jurisdiction of the Court generally, the bar does not and cannot extend to the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India. In Rohtas Industries Limited v. Rohtas Industries Staff Union, AIR 1976 SC 425, the Supreme Court was considering the validity of a statutory award made under Section 10A of the Industrial Disputes Act, 1947. In that case the Court ruled that the award can be up-set if an apparent error of law stains its face. The award in Rohtas Industries case (supra) contained some reasons and the validity of those reasons were examined by the Court on the ground whether there was any error of law apparent on the face of the award. The Court further observed that the distinction between a private award and the one under Section 10A of the Industrial Disputes Act, 1947 is fine but real. On the basis of the principles laid down by the Supreme Court in Rohtas Industries case (supra), we have no hesitation to hold that an award under Section 7B of the Act is available to be scrutinised by a writ Court on the well-known and well-recognised grounds to which we need not make mention because the award at An-nexure-7 in O.J.C. 2608 of 1993 was not questioned before us on such ground.
9. Section 7B of the Act requires the Central Government to refer the dispute to an arbitrator appointed by it. When the law vests such power in the Central Government, it cannot be imagined that it would appoint a petty or minor officer for the purpose of deciding the dispute by way of arbitration. Although there is no mention in Section 7B of the Act regarding the procedure to be adopted by an arbitrator, it cannot be gainsaid that he is required to act fairly and justly. He may adopt his own procedure for disposal of the matter before him but while doing so the parties to the arbitration proceedings are entitled to reasonable notice of the time and place of hearing. The arbitrator must give the parties a fair hearing and opportunity to substantiate their respective claims. He must dispose of the matter strictly in accordance with law and by following the basic principles of natural justice. If an arbitrator decides a dispute in violation of the principle of natural justice, it is always open to an aggrieved party to question the validity of the award in a petition under Article 226 of the Constitution. Similarly, if the appointment of arbitrator is made by a person not competent to do or if he exhibits bias or prejudice against a party, those would be valid grounds for an aggrieved party to move a writ Court. For all the aforesaid reasons, Section 7B of the Act cannot be declared invalid on the grounds, urged by the learned counsel for the petitioners.
10. Judicial review is held to be one of the basic features of the Constitution. We have already held that an award made under Section 7B of the Act cannot escape the scrutiny of a writ Court on valid and cogent grounds being urged. Since the jurisdiction of the writ Court is not ousted under Section 7B of the Act. We do not find any merit in the contention of Shri Das that the said provision destroys the basic feature of the Constitution. We may state here that in O.J.C. No. 6879 of J995 the award made by the arbitrator has not been enclosed to the petition. We are, therefore, not in a position to scrutinise the validity of the award.
11. So far as the award at Annexure 7 Jn O.J.C. No. 2608 of 1993 is concerned, the Full Bench by order dated 15-9-1994 has noticed that there are reasons in support of the same. Perusal of the award shows that the arbitrator did not accept the plea of the petitioner that his telephone line was often cross-connected and/or his STD lines were tampered with. The conclusion arrived at by the arbitrator was based on analysis of materials available on record We in exercise of jurisdiction under Articles 226 and 227 of the Constitution cannot substitute our findings by re-appreciating or reassessing the materials. Shri Jena, learned counsel for the petitioner in O.J.C. No. 2608 of 1993 has not pointed out any specific ground or error in the decision making process of the arbitrator. In the circumstances, we uphold the validity of the award at Annexure-7.
12. In the ultimate analysis, we do not find any merit in both the writ petitions which are accordingly dismissed. There shall be no order as to costs.
Susanta Chatterji, J.
13. I agree.