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Judgment
R. Jayasimha Babu, J.—The first respondent minor girl aged 8 years suffered serious burn injuries on 06.03.1998 when, according to her
boiling tar came into contact with exposed skin when she was on road, that accident having occurred by reason of the alleged negligence on the
part of the employee of the appellant Panchayat Union. She through her natural guardian filed a writ petition claiming compensation. In that petition,
the learned single Judge appointed an arbitrator to assess the amount of compensation payable. That order was challenged by the Panchayat Union
by way of an appeal. The Division Bench confirmed the appointment of arbitrator. That order was made on 29.09.1999.
Thereafter the arbitrator appointed by the Court who was a retired District Judge received the claim petition, counter affidavit filed by the
Panchayat Union and recorded evidence of witnesses for the claimant as also for the Panchayat Union. At the conclusion of his enquiry he
assessed the amount payable to the claimant at Rs.1,50,000/- together with interest at the rate of 12% from the date of the writ petition.
After that award was filed into this Court objections were filed by the Panchayat Union. The writ petition that had been closed with the
appointment of arbitrator, was taken up once again and further order made in terms of the award with the modification that the interest was
directed to be paid from the date of the award.
After this writ appeal was filed, the appellants have deposited the amount awarded less the sum of Rs. 25,000/- which had been paid even
before the earlier writ appeal was filed and that amount has been deposited in the name of the minor claimant in State Bank of India.
The Supreme Court on 27.04.2000 rendered it''s judgment that the case of Tamil Nadu Electricity Board vs. Sumathi AIR 2000 SC 1608,
wherein the Court held that in cases where facts are in dispute, a petition under Article 226 should not have been entertained for the purpose of
awarding compensation, except in cases where there is negligence on the face. The Court also in that case pointed out that referring the matter to
the arbitrator, after entertaining a petition under Article 226 of the Constitution of India, when negligence is disputed, was not proper. It was further
held that there can be no arbitration under the Arbitration & Conciliation Act when there is no arbitration agreement as defined u/s 7 of that Act. It
was also pointed out that an award passed in an arbitration under that Act is to be treated as a decree and there is no question of the writ court
making a decree in terms of the award.
The Court in that case also took note of the fact that the amounts awarded by the Arbitrator in terms of which the High Court had made a
decree having been paid, those amounts were not to be recovered from those claimants.
Though the order of the Division Bench made by this Court earlier upholding the appointment of arbitrator is not in accordance with law
declared by the Supreme Court in the case of TNEB vs. Sumathi, AIR 2000 SC 1603, as there is no arbitration agreement as contemplated u/s 7
of the Act, and it was also not open to the learned single Judge to revive a writ petition which has been disposed off and proceed further to make a
decree in terms of an arbitration award, which was not, in fact, an arbitration award under the Act, we do not propose to interfere with the order
as the amount has already been deposited in favour of the claimant. We also noticed the fact that the amount was determined after hearing the
parties and considering the evidence placed by the respective parties before a person who was a former judicial officer.
We, however, make it clear that we are not to be understood as having approved of the procedure that had been followed in this case. We
record our disapproval of the same. The arbitration as contemplated under the Act must be in accordance with the agreement and it is not open to
the Court to devise a procedure and label it as arbitration when it does not conform to the requirements of that Act. The law laid down by the
Supreme Court in the case TNEB that when negligence is disputed, this Court should not, in a petition under Article 226 proceed to award
compensation or direct appointment of arbitration for the purpose of determining the same, has to be borne in mind when a petition under Article
226 is brought before the Court.
Having regard to the special facts of this case, the amount which has been paid to the claimant shall not be recovered by the appellants. The writ
appeal is disposed off accordingly.