DEPARTMENT OF TELECOMMUNICATIONS versus GUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD.

Citation: [2010] 12 S.C.R. 384 · Decided: 24-09-2010 · Supreme Court of India · Bench: R.V. RAVEENDRAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2010] 12 S.C.R. 384 
DEPARTMENT OF TELECOMMUNICATIONS 
v. 
GUJARAT CO-OPERATIVE MILK MARKETING 
FEDERATION LTD. 
(Civil Appeal No. 8249 of 2010) 
SEPTEMBER 24, 2010 
[R.V. RAVEENDRAN AND DALVEER BHANDARI, JJ.] 
Constitution of India, 1950 - Article 226 - Judicial 
C review of award passed u/s 78 of Telegraph Act - Scope of -
Telephone bill raised - Complaint by the subscriber alleging 
that the calls charged for, were made from another phone-
number - Telephone Department, on verification, found the 
bills to be correct - Administrative appeal rejected, confirming 
D the demand - Arbitrator also confirming the demand in its 
award - Award set aside by High Court in exercise of its writ 
jurisdiction - Letters Patent Appeal also dismissed - On 
appeal, Held: High Court, in exercise of its power of judicial 
review, wrongly interfered with the finding of the Arbitrator -
E 
Order of the High Court was on assumptions and inferences 
and not based on evidence - High Court was prejudiced 
against the Telephone Department -
Conduct of Single 
Judge of High Court in forcing the Department to give up and 
reduce its claim, is required to be discouraged - Telegraph 
F 
Act, 1885 - s. 7-B. 
The Managing Director of the respondent was the 
subscriber of a telephone connection. Two of his 
telephone bills were for large amount. The billing was on 
account of a large number of international calls i.e. 'party 
G calls' or 'sex talk calls.' 
The respondent made complaint. The appellant-
Department informed that the bills were correct. The 
respondent filed administrative appeal. On the direction 
H 
384 
DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP. 
385 
MILK MRKTING FEDERATION LTD. 
of the High Court in a writ petition, the appellant decided 
A 
the appeal, dismissing the same. The writ petition against 
the order was disposed of on the ground that alternative 
remedy of arbitration u/s. 7B of Telegraph Act, 1885 was 
available. In Letters Patent Appeal, the High Court 
directed the dispute to be referred to arbitration. The 
B 
arbitrator held that the bills were proper. The award was 
further challenged in a writ petition. The Single Judge of 
the High Court quashed the bills holding that the decision 
of the arbitrator was not valid because he decided the 
matter on inferences and presumptions without any c 
evidence; and that the arbitrator was lower in l'ank than 
the officer of the appellant-Department, who had decided 
the administrative appeal. The letters patent appeal 
against the order was dismissed by the Division Bench 
of the High Court. Therefore, the instant appeal was filed. 
D 
Allowing the appeal, the Court 
HELD: 1. There was no ground for the High Court to 
interfere with the findings arrived at by the Arbitrator in 
exercising the power of judicial review. By assuming a 
E 
non-existing appellate jurisdiction and by making wrong 
assumptions and drawing wrong inferences, the Single 
Judge of the High Court has interfered with a reasoned 
arbitral. award. The Single Judge of the High Court has 
ignored the law laid down regarding scope of 
F 
interference in writ jurisdiction with regard to awards u/ 
s. 7B of the Telegraph Act, 1885. The Single Judge has 
proceeded as if he was sitting in appeal over the award 
of Arbitrator. He also assumed, without any basis, that 
the arbitrator had proceeded on presumptions and 
G 
inferences, when in fact it is the Single Judge who made 
assumptions and drew inferences, not based on 
evidence. [para 8 and 13] [397-C] [394-E-F] 
M.L.Jaggi v. Mahanagar Telephones Nigam Ltd. 1996 
(3) SCC 119, referred to. 
H 
386 
SUPREME COURT REPORTS 
[2010] 12 S.C.R. 
A 
2.1 The Single Judge was wrong in holding that the 
award was invalid because it was made by an Arbitrator 
who was junior in rank, when compared to the officer 
who passed the appellate order. It is a usual practice for 
the Government Departments to have the employees of 
B the Department (high level officers unconnected with the 
contract) as Arbitrators. The mere fact that the Arbitrator 
is of a rank lower than the officer who rejected the claim 
of the subscriber would not invalidate the arbitration nor 
can it be a reason for imputing bias to the Arbitrator. [Para 
C 14) [397-D-E] 
2.2. In the instant case, the Arbitrator had neither 
dealt with the matter at any point of time nor was he a 
subordinate of the appellate authority in the concerned 
telecom district, who decided the matter. Therefore, there

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