PUNJAB STATE ELECTRICITY BOARD MAHILPUR versus MIS. GURU NANAK COLD STORAGE AND ICE FACTORY, MAHILPUR AND ANR.

Citation: [1996] SUPP. 3 S.C.R. 534 · Decided: 12-07-1996 · Supreme Court of India · Bench: K. RAMASWAMY · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
PUNJAB STATE ELECTRICITY BOARD MAHILPUR 
B 
c 
v. 
MIS. GURU NANAK COLD STORAGE AND ICE FACTORY, 
MAHILPUR AND ANR. 
JULY 12, 1996 
[K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Indian Elec(Jicity Act, 1910: Sections 7-A( 1), 8 to 10, 12 to 19, 32, 33, 
44(3), 52, 55(3) and 78-A(2). 
Elec(Jicity (Supply) Act, 1948: Section 76(2). 
Electricity dues-Default in payment committed by respondent-Dis-
connection of supply by appellant-Boarcf-Respondent claiming damages 
from Board and issuing notice to appellant-Board to refer the dispute for 
D arbitration-Elecllicity Board's suit for pe11nane11t injunction restraining the 
appointment of Arbitrator dismissed by tiial cowt-Dismissal of suit upheld 
by appellate cowt as well as by High Cowt-Appeal prefen·ed before Supreme 
Cowt-Held the dispute regarding damages was not arbitable-Held the High 
Court and courts below were clearly CJTor in holding that the matter was to 
E be refoTed to arbitration and arbitrator had to decide the dispute as to 
arbitrability or on merit-The damages which ensued for disconnection is not 
a dispute arising under Section 19( 1) of the Electricity Act-Section 52 of the 
Electricity Act or 76(2) of Supply Act read with Section 19(1) of Electricity 
Act has no application to the dispute-Section 52 of the Electricity Act does 
not get attracted; and equally section 76(2) of the Supply Act-In view of the 
F express admission made by the respondent that there is no agreement of 
arbitration as defined in Section 2(a) of the Arbitration Act, Section 33, 
therefore, does not get attractecf-Section 46 does not apply as the scheme 
under both the Acts viz. Arbitration Act and Electricity Supply Act in this 
behalf is inconsistent. 
G 
Punjab S.E.B. v. Bassi Cold Storage, [1994) 2 SCC 124, distinguished. 
The Mysore State Elect1icity Board v. Bangalore Woollen, Cotton and 
Silk Mills Ltd. & Ors., [1963) Supp. 2 SCR 127, referred to. 
H 
Mysore Manufacturers & Traders v. State of Kamataka, AIR [1982) 
534 
PB. STATEELF.CTRICITY BD. '· GURUNANAKCOLDSTORAGEICEFACTDRY 
535 
Karnataka 54, approved. 
A 
Arbitration Act, 1940: Sections 2(a), 33 and 46. 
Arbitration agreement-Question as to existence and validity of agree-
ment-Held the existence and validity of the arbitration agreement has to be 
decided by the Civil Cowt-Arbitrator cannot clothe himself with jwisdiction B 
to conclusively decide it. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9501 of 
l.996. 
From the Judgment and Order dated 14.12.92 of the Punjab & 
Haryana High Court in R.S.A. No. 1993 of 1990. 
P.P. Rao, R.S. Sodhi and Darshan Singh for the Appellant. 
M.S. Gujral and Mrs. Kirti Mishra, for the Respondents. 
The following Order of the Court was delivered : 
Leave granted. 
This case has a chequered history, the entire narration of which is 
not material to the controversy at hand. Suffice it to state that pursuant to 
the default committed by the respondent in payment of the dues, the 
appellant-Boa~ had disconnected the supply of electrical energy on 
20.8.1982. For the recovery of the arrears, the appellant had laid the suit. 
Ultimately, the suit ended in the order passed by this Court in C.A. No. 
2767 of 1987 on February 15, 1989 upholding the decree for recovery of 
the arrears for the disconnection of the supply of electrical energy; the 
respondent had a notice issued on August 1, 1985 claiming damages in a 
sum of Rs. 68,25, 734 which, we are informed, subsequently increased to 
over Rs. 93,00,694.00. Therein, the respondent called upon the appellant 
c 
D 
E 
F 
to refer the dispute to an arbitrator under Section 52 of the Indian 
Electricity Act, 1910 (for short, the 'Electricity Act') or under Section 76(2) G 
of the Electricity (Supply) Act, 1948 (for short, 'Supply Act'). Calling that 
notice in question, the appellant filed suit No. 291 of l.985 on the file of 
the Sub-Judge, I class for declaration and also for permanent injunction 
restraining the appointment of an arbitrator to adjudicate the dispute 
raised in the notice. The civil suit was dismissed on March 31, 1989 which H 
536 
SUPREME COURT REPORTS [1996] SUPP. 3 S.C.R. 
A was confirmed in appeal. The High Court in the impugned judgment and 
order dated December 14, 1992 in Second Appeal No. 1993 of 1990 
dismissed the appeal finding thus : 
B 
c 
D 
"A perusal of Section 32 shows that no suit is competent on any 
ground whatsoever "for a decision upon the existence, effect or 
validity of an arbitration agreemen
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