DEPARTMENT OF TELECOMMUNICATIONSversusGUJARAT CO-OPERATIVE MILK MARKETING FEDERATION LTD.

                     [2010] 12 S.C.R. 384


A          DEPARTMENT OF TELECOMMUNICATIONS
                                 v.
          GUJARAT CO-OPERATIVE MILK MARKETING
                      FEDERATION LTD.
               (Civil Appeal No. 8249 of 2010)
B                     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
0 was no justification for the Single Judge to hold that the
  award was invalid merely because the Arbitrator was of
  a rank lower than that of the officer who passed the
  appellate order. Moreover, the appeal was decided in
  pursuance of a direction of the High Court. Again in a
E subsequent proceeding, the High Court directed that the
  matter should be referred to arbitration u/s. 78 of the Act
  and accordingly the dispute was referred to arbitration
  and the departmental officer functioning as Arbitrator
  decided the matter. There is nothing irregular or
F erroneous in the said procedure. [Para 14) [398-E; G-H]
  [399-A]

      Secretary to Govt. Transport Department v. Munuswamy
  Mudaliar -1988 (Supp) SCC 651; Indian Oil Corporation Ltd.
G v. RajaTransport (P) Ltd. - 2009 (8) SCC 520, relied on.

         3. The Single Judge had virtually prejudged the
    matter and was prejudiced against the appellant. The
    Single Judge allowed himself to be swayed by the
    following irrelevant factors in deciding against the
H
 DEPART OF TELECOMMUNICATIONS v. GUJARAT COOP.             387
          MILK MRKTING. FEDERATION LTD.

appellant: (i) the respondent had come up before the High        A
Court thrice; and (ii) the department counsel did not
agree with the suggestion of the Single Judge to
reconsider the bill amounts by issuing a revised bill on
the basis of the average of the bills for last six months.
The Single Judge proceeded on the basis that the attitude        B
of the Department was adamant and it was indulging in
unnecessary litigation. The Department was simply
pursuing a legitimate claim. The matter had been decided
by a statutory Arbitrator. Therefore, if the Department
decided not to give up or reduce its claim, that cannot be       c
held against the Department. The order shows that the
Single Judge had tried virtually to force the Department
to agree for suggestions which obviously the officers and
the counsel for the Department could not agree. Such
attitude on the part of the High Court requires to be            D
discouraged. [Para 15] [399-B-E]
                       Case Law Reference:
       1996 (3) sec 119        Referred to.           Para 8
       1988 (Supp) SCC 651 Relied on.                 Para 14    E

       2009 (8) SCC 520        Relied on.             Para 14

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
8249 of 2010.
                                                                 F
    From the Judgment & Order dated 23.1.2007 of the High
Court of Gujarat at Ahmedabad in Letters Patent Appeal No.
1421 of 2006.

    Subhangi Tuli, Manish Kumar, Sudhir Nandrajog for the        G
Appellant.          '

       Nikhil Goel, Sheela Goel for the Respondent.

   ' The Judgment of the Court was delivered by
   I
                                                                 H
    388          SUPREME COURT REPORTS              [2010] 12 S.C.R.


A         R.V.RAVEENDRAN, J. 1. Leave granted.

         2. The respondent was the subscriber of telephone
    bearing No.40193, in Anand Town installed at the residence of
    its Managing Director (for convenience we will also refer to the
    Managing Director as the 'subscriber'). The bi-monthly bills in
8
    regard to the said telephone were usually around Rs.8500. The
    appellant served on the respondent the following two bills
    aggregating to Rs.454,652 :

          Bill date       Period of the bill            Amount
c
          1.4.1996        16.1.1996 to 15.3.1996        362,723/-

          1.6.1996        16.3.1996 to 15.5.1996         91,929/-


0        The huge billing was on account of a large number of
    international calls known as 'party calls' or 'sex talk calls' to
    number 001"-4152-085-234 and several calls to 001-4152-085-
    220/230/236/239.

E       3. The respondent made a written complaint dated
  25.4.1996 after the receipt of the first bill stating that it had been
  mischievously and unscrupulously billed for large number of
  international calls made from some other numbers, but shown
  as having made from its number. It also complained in the said
F letter that many a time, when the subscriber lifted the telephone
  for making calls, he used to hear some ongoing talk. The
  Divisional Engineer of the appellant after verification informed
  the respondent by letter dated 21.5.1996 that the bills were
  correct for the following reasons :

G          (a)    Total line was underground and no portion of the line
                  was exposed;

           (b)    Absolute control to make a call or not to make a
                  call, was with the subscriber as the phone had
H                 dynamic lock facility.
 DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP.             389
 MILK MRKTING. FEDERATION LTD. [R.V. RAVEENDRAN, J.]

      (c)   The telephone was working continuously and there        A
            was no complaint of the telephone being out of
            order. (Note : If the line is misused externally, the
            telephone of the subscriber will be dead with no dial
            tone).
                                                                    B
      (d)   The bills showed that the calls were made daily over
            a long period and not on any particular single day.

      (e)   As the telephone was connected to an electronic
            exchange, there was no chance of excess
            metering.
                                                                    q

       4. The respondent filed an administrative appeal to the
General Manager, Kheda Telecom District, Nandiad. However
as the bills amounts were not paid, the telephone was
disconnected on 29.5.1996. A writ petition (SCA No.4188/            D
1996) filed by the respondent was disposed of by the Hig.h
Court by order dated 29. 7.1997- directing the General Manager
of the appellant to examine the appeal filed by the respondent
in regard to the bills in question and render a reasoned order
after giving a hearing to the respondent. After hearing, the        E
General Manager, Kheda Telecom District, Nadiad made an
order dated 12.2.1998 rejecting the appeal and confirming the
demands under the two bills, for the following reasons: (i) The
subscriber had not made use of the STD/ISO dynamic locking
facility which was availa.ble through a sophisticated electronic    F
exchange; (ii) all rooms in the residence of the subscriber had
plug/socket arrangements and all family members and visitors
could use the parallel lines for making ISO calls (in particular
'party line calls') even without the knowledge of the subscriber;
(iii) the possibility of any external misuse was ruled out as the
                                                                    G
Distribution Point Box was located within the campus premises
of the respondent which was under around the clock security
of the security guards employed by the respondent and no part
of the underground cable was exposed; (iv) significantly during
the disputed period not even a single complaint was booked          H
    390      SUPREME COURT REPORTS                [2010] 12 S.C.R.


A from. the telephone; and though in the complaint dated
  25.4.1996, it was stated for the first time that many a time when
  the subscriber lifted the phone to receive the call he heard
  someone talking on the line, no such complaint was ever made
  prior to 25.4.1996 to the department; and (v) the disputed ISO
B calls were 'party line international sex talk calls' which
  originated from the subscriber's telephone and having regard
  to the fact that these calls were made in between the calls to
  other stations in India in such close proximity that there was no
  chance of possible misuse by any third party or staff of telecom
c department.

          5. Feeling aggrieved, the respondent again approached
   the High Court by filing another writ petition (SCA No.1416/
   1998). The said petition was disposed of on the ground of
   availability of alternative remedy of arbitration under section 7B
D of the Indian Telegraph Act, 1885 ('Act' for short). The
   respondent challenged the said order in a Letters Patent
   Appeal wherein by order dated 21.10.1989 the Division Bench
   directed the dispute to be referred to arbitration. In pursuance
   of it, the Central Government in exercise of power under section
E .7B of the Act appointed Mr. Vineet Bhatia, Deputy General
   Manager, Telecom East and Arbitrator for Ahmedabad Telecom
   district as Arbitrator for deciding the dispute.

         6. The Arbitrator after hearing made an award dated
F   4.5.2000 holding that the bills were proper and the respondent
    had to make complete payment of the said bills. The following
    summary of the reasoned award is extracted below:

          "1. Though STD/ISO dynamic locking facility for the
          telephone was available, it was not used by the subscriber.
G
          2. There was no possibility of external misuse from
          distribution point or pillar or from the Main Distribution
          Frame, as these were under lock and key or around the
          clock supervision.
H
 DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP.             391
 MILK MRKTING FEDERATION LTD. [RV. RAVEENDRAN, J.]

    3. Even though the subscriber stated that he used to hear       A
    some cross talk on the line during the period of the
    disputed bill, no complaint was registered with the
    Telephone Department. Therefore the said complaint was
    apparently an afterthought made up after receiving the first
    bill for the disputed period.                                   B

    4. All the rooms in the house of subscriber had plug and
    socket arrangement and there were two telephone
    instruments in the house and as such calls could be made
    from anywhere in the house.                                     c
    5. The calls preceding/succeeding the disputed calls were
    admittedly made by the subscriber. Hence no misuse by
    diversion was possible.

    6. The disputed calis were 'international party line calls'.    D
     For dialing these numbers there was no need to establish
     any prior relationship between caller and the called
   . numbers. As such there was no age/sex bar for dialing
    these numbers and hence could have been done by any
     of the family members of the subscriber. From the school       E
     details of his. son, presented by the subscriber vide his
     letter dated 3.5.2900, it was clear that his final Pre-Board
     examinations for X Std. were concluded on 03.02.1996
     and the disputed .calls started from the very next day. As
     such, the possibility of these calls having made by the son    F
     of the subscriber'cannot also be ruled out."
                      !


     7. The said awar~ was challenged by the respondent in a
writ petition (SCA No·.8734/2000). A learned Single Judge of
the High Court allowed the writ petition with costs of Rs.5000      G
and quashed the bills dated 1.4.1996 and 1.6.1996 and the
consequential demand notice dated 4.5.2000. The last para of
the order of the learned Single Judge extracted below,
demonstrates the manner in which he viewed the entire matter:

.... "This is a peculiar case showing the adamant attitude on       H
    392       SUPREME COURT REPORTS                  [2010] 12 S.C.R.


A         the part of the respondent authorities. The bill has been
          issued in the year 1996 and there were about three round
          of litigations. The Arbitrator who was appointed was
          subordinate to the General Manager who is bound to be
          influenced by the decision of the General Manager or could
B         not have taken a contrary view to the order of his superior.
          Therefore, before the argument was started, an opportunity
          was given to the counsel for the respondent to reconsider
          their decision. However the officer as well as the learned
          counsel, who is an officer of the Court, has not accepted
c         the said suggestion. It was also open to the respondent
          to issue a revised bill as per the decision of this court or
          at least average bills for the last six months. It goes without
          saying that the adamant attitude of such litigants increases
          the unwanted litigation. Therefore, the respondent shall pay
          a sum of Rs.5,000/- (Rupees Five Thousand only) by way
D
          of costs."

       · The findings recorded by the learned Single Judge in
    support of his order, in brief are:

E         (i) As the appeal against, the Bills had been decided by
          the General Manager, Kheda Telecom District on
          12.2.1998 upholding the bills, the Arbitrator should have
          been a person higher in rank to the General Manager. As
          the Arbitrator was of a lower rank of a Deputy General
F         Manager, the decision of the Arbitrator was not valid in law
          and on this ground alone the writ petition had to be allowed.

         (ii) The Arbitrator had decided the matter on inferences
         and presumptions without any evidence. Reference to the
         existence of parallel telephone lines and subscriber's son
G        being at home after examinations, to infer that he might
         have miSllSed the telephone was a finding which was
         without basis ,~n_Jbe absence of evidence that the
       . s,ubscriber's son ha·d in fact misused the telephone.
         Similarly, the assumption by the Arbitrator that any member
H
 DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP. 393
 MILK MRKTING FEDERATION LTD. [RV RAVEENDRAN, J.]

    of subscriber's family could have used the phone for           A
    making 'party line calls' was a casual presumption.

    (iii) A complaint dated 25.4.1996 was made by the
    subscriber
    .J   ,
                stating that the first bill dated 1.4.1996 was
    excessive. Even assuming that there was misuse of the          B
    phone, in the house of the subscriber, when the subscriber
    came to know about the misuse when the bill was
    received, he would have restricted or prevented the
    misuse. That means the next bill dated 1.6.1996 should
    have been a normal bill. But the said bill was also
    excessive thereby demo'nstrating that the mischief calls       C
    continued even during the second bill period. This showed
    that there was a possibility of someone else misusing the
    number of the subscriber for making ISO calls.

    (iv) The complaint dated 25.4.1996 stating that the            D
    subscriber sometimes used to hear ongoing talk, when he
    lifted the phone ·for making calls, was not properly
    considered by the Arbitrator.

    The Letters Patent Appeal filed by the appellant against       E
    the said order of the learned single Judge, has been
    dismissed by a Division Bench by a brief non-speaking
    order dated 23.1.2007. The said order is challenged in this
    appeal.

     8. The scope of interference in writ jurisdiction in regard   F
to Arbitral awards under section 7B of the Act was considered
by this Court in M.L.Jaggi v. Mahanagar Telephones Nigam
Ltd. [1996 (3) sec 1191 :

    "It is seen that under Section 7-B, the award is conclusive G
    when the citizen complains that he was not correctly put
    to bill for the calls he had made and disputed the demand
    for payment. The statutory remedy opened to him is one
    provided under Section 7-B of the Act. By necessary
    implications, when the Arbitrator decides the dispute under H
    394       SUPREME COURT REPORTS                (2010] 12 S.C.R.


A         Section 7-B, he is enjoined to give reasons in support of
          his decision since it is final and cannot be questioned in
          a court of law. The only obvious remedy available to the
          aggrieved person against the award is judicial review
          under Article 226 of the Constitution. If the reasons are not
B         given, it would be difficult for the High Court to adjudge as
          to under what circumstances the Arbitrator came to his
          conclusion that the amount demanded by the Department
          is correct or the amount disputed by the citizen is
          unjustified. The reason would indicate as to how the mind
c         of the Arbitrator was applied to the dispute and how he
          arrived at the decision. The High Court, though does not
          act in exercising judicial review as a court of appeal but
          within narrow limits of judicial review it would consider the
          correctness and legality of the award. No doubt, as rightly
          pointed out by Mr. V.R.Reddy, Additional Solicitor General,
D
          the questions are technical matters. But nonetheless, the
          reasons in support of his conclusion should be given."

                                                (emphasis supplied)

E   Though the learned Single Judge referred to the said decision,
    he has ignored the law laid down therein. The learned 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 inferences,
F   when in fact it is the learned Single Judge who made
    assumptions and drew inferences, not based on evidence. We
    may briefly refer to them.

         9. The learned Single Judge held that the Arbitrator had
    without any evidence assumed that the son or other family
G   members of subscriber must have used the telephone available
    on account of plug/socket arrangement in every room as also
    an extra telephone, parallel lines for making the "international
    party calls". The basis for the billing is not the said assumption
    or inference. The basis is the clear evidence consisting of the
H   records of Telecom and the meters which showed that the billed
  DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP.               395
  MILK MRKTING FEDERATION LTD. [RV. RAVEENDRAN, J.]

  calls, that is, the international party line calls, were regularly   A
  being made from the said telephone. The inference drawn by
  the Arbitrator that the subscriber's son or other family members
. must have made the calls from a parallel line by using the plug
  and socket facility available in various rooms, has to be read
  in the context of the assertion of the subscriber that he had not    B
  made any such party calls. The Arbitrator had three facts before
  him : (1) that the department records showing that the disputed
  international party calls were made from the telephone in
  question regularly; (2) that the subscriber had plug and socket
  facility in several rooms with an extra telephone which could be     C
  used any time by any one in the house; and (3) that the
  subscriber had not made use of the STD/ISO dynamic lock
  facility, though available. Therefore when there was an
  assertion by the subscriber that he had not made any such
  calls, the Arbitrator merely made an inference from the proved       D
  facts that even if the subscriber had not made the calls, it was
  possible that his family members including his son (who had
  returned home a day prior to the commencement of 'party calls')
  could have made such calls by using the plugs and sockets
  arrangement and parallel lines in several rooms without the          E
  knowledge of the subscriber. The Arbitrator was only dealing
  with a contention by the subscriber that he had not made any
  such calls and giving his reasons for rejecting such a
  contention.

      10. The learned Single Judge next inferred that even if          F
such calls were being made earlier, after receiving the bill dated
1.4.1996, the subscriber would have naturally restricted any
such calls; and the fact that even after receipt of the first bill,
there were such 'party calls' as was evident from the second
bill, made it improbable that the &ubscriber's phone was used          G
for making such 'party calls' and therefore it had to be inferred
that someone else was mischievously using the said telephone
connection for making unauthorised ISO calls. This inference
is also contrary to facts. The first bill dated 1.4.1996 was for
the period 16.1.1996 to 15.3.1996. Though the second bill              H
    396       SUPREME COURT REPORTS                [2010] 12 S.C.R.


A dated 1.6.1996 was subsequent to complaint dated 25.4.1996,
  the said bill related to the period 16.3.1996 to 15.5.1996, major
  portion of which was prior to 25.4.1996. Further, the second
  bill was only for Rs.91,929/- as against the first bill for
  Rs.3,62,723/-. The amount of the second bill and the period for
B the second bill demonstrates that after receipt of first bill and
  complaint, there was in fact some kind of control and reduction
  in such phone calls. Therefore the inference by the learned
  Single Judge was absolutely baseless.

        11. The finding of the learned Single Judge that the
C Arbitrator had not given importance to the complaint in the letter
  dated 25.4.1996 that he had heard cross talk on the line is also
  incorrect. The Arbitrator has dealt with this matter. The simplest
  explanation is the existence of plug-socket facility and parallel
  lines. If the parallel line was being used and the subscriber lifted
D the receiver, he would certainly hear the conversation or talk,
  which was not from any external source, but from the very same
  telephone.

       12. The last assumption by the learned Single Judge was
E with reference to an affidavit filed by the Telecom Department
  in some criminal proceeding against some departmental
  employee unconcerned with this case 1 admitting that its
  employee had tampered with the instruments for making
  international calls, and as a result the department had to grant
F rebates to several subscribers. But that cannot be a ground for
  granting rebate in this case, as no irregularity was found in this
  case. The fact that in some case, some departmental employee
  had committed some tampering, is not a ground for inferring
  that there must have been tampering in this case. The High
G Court has inferred that the fault was with the department
  because it refused to refer the matter for CBI for investigation.
  The learned Single Judge has observed:

          "It is also required to be noted that the petitioner had
          requested for an investigation into the matter by Central
H         Bureau of Investigation. According to the petitioner, if such
 DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP: 397
 MILK MRKTING. FEDERATION LTD. [RV RAVEENDRAN, J.]

     an investigation is resorted to, it would unearth the mischief A
     and it was further stated that the petitioner was ready and
     wiling to bear the costs thereof. Even this was not accepted
     by the respondent authority, which would indicate that the ·
   : respondent did not want to go deep into the matter."
                                                                       B.
Reference to CBI is not a condition precedent for raising a bill,
merely because the subscriber demands it.

     13. There was thus no ground for the High Court to interfere
with the findings arrived at by the Arbitrator in exercising the       C
power of judicial review. By assuming a non-existing appellate
jurisdiction and by making wrong assumptions and drawing
wrong inferences, the learned Single Judge has interfered with
a reasoned arbitral award.

      14. We may next deal with the conclusion of the learned          D
Single Judge that the award was invalid because it was made
by an Arbitrator who was junior in rank, when compared to {he
officer who passed the appellate order dated 12.2.1998. It is
a usual practice for the government departments to have the
employees of the departme_nt (high level officers unconnected          E
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 or can be a
reason for imputing bias to the Arbitrator (see Secretary to
Govt., Transport Department v. Munuswamy Mudaliar- 1988                F
(Supp) SCC 651 and Indian Oil Corporation Ltd. v. Raja
Transport (P) Ltd. - 2009 (8) SCC 520). In Indian Oil Corpn.
Ltd. (supra) this court held thus :

     'The fact that the named Arbitrator is an employee of one
     of the parties is not ipso facto a ground to raise a              G
     presumption of bias or partiality of lack of independence
     on his part.

     There can however be a justifiable apprehension about the
     independence or impartialilyof an Employee-Arbitrator, if         H
    398       SUPREME COURT REPORTS                [2010] 12 S.C.R.


A         such person was the controlling or dealing authority in
          regard to the subject contract or if he is a direct
          subordinate (as contrasted from an officer of an inferior
          rank in some other department) to the officer whose
          decision is the subject matter of the dispute. Where
B         however the named Arbitrator though a senior officer of the
          government/statutory body/government company, had
          nothing to do with execution of the subject contract, there
          can be no justification for anyone doubting his
          independence or impartiality, in the absence of any
c         specific evidence. Therefore, senior officer/s (usually heads
          of department or equivalent) of a government/statutory
          corporation/public sector undertaking, not associated with
          the contract, are considered to be independent and
          impartial and are not barred from functioning as Arbitrators
          merely because their employer is a party to the contract."
D
                                                 (emphasis supplied)

    In this case, the Arbitrator had neither dealt with the matter at
    any point of time nor was he a subordinate of the appellate
E   authority in the concerned telecom district who decided the
    matter. The bills related to a telephone installed at the premises
    in Anand/Nadiad falling within the jurisdiction of the General
    Manager Telecom Kheda Telecom District, Nadiad and the
    appellate order dated 12.2.1998 was passed by the General
F   Manager of Kheda Telecom District, Nadiad. The Arbitrator
    was working as a Deputy General Manager (T) East & Arbitrator
    Ahmedabad Telecom District, not under the General Manager
    who passed the appellate order but in a different telecom
    district. Therefore, there was no justification for the learned
G   Single Judge to hold that the award was invalid merely because
    the Arbitrator was of a rank lower than that of the officer who
    passed the appellate order. It should also be noted that the
    appeal was decided by the General Manager, Kheda Telecom
    district in pursuance of a direction of the High Court. Again in
H   a subsequent proceeding the High court directed that the
 DEPART. OF TELECOMMUNICATIONS v. GUJARAT COOP.              399
 MILK MRKTING. FEDERATION LTD. [RV RAVEENDRAN, J)

matter should be referred to arbitration under section 78 of the     A
Act and accordingly the dispute was referred to arbitration and
the departmental officer functioning as Arbitrator decided the
matter. There is nothing irregular or erroneous in the said
procedure.
                                                                     B
      15. The last para discloses the learned Single Judge had
virtually prejudged the matter and was prejudiced against the
appellant. The learned Single Judge allowed himself to be
swayed by the following irrelevant factors in deciding against
the appellant: (i) the respondent had come up before the High        C
Court thrice; and (ii) the department counsel did not agree with
the suggestion of the learned Single Judge to reconsider the
bill amounts by issuing a revised bill on the basis of the average
of the bills for last six months. The learned Single Judge
proceeded on the basis that the attitude of the department was       D
adamant and it was indulging in unnecessary litigation. The
department was simply pursuing a legitimate claim. The matter
had been decided by a statutory Arbitrator. Therefore if the
department decided not to give· up or reduce its claim that
cannot be held against the department. The order shows that
the learned Single Judge had tried virtually to force the            E
department to agree for suggestions which obviously the
officers and the counsel for the department could not agree.
Such attitude on the part of the High Court requires to be
discouraged. Unfortunately the division bench did not examine
any of these aspects and merely affirmed the decision of the         F
learned Single Judge.

     16. We therefore allow this appeal, set aside the order of
the learned Single Judge and the Division Bench and dismiss
the writ petition filed by the respondent challenging the bills.     G

K.K.T.                                          Appeal allowed.