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Judgment
S. Muralidhar, J.—O.M.P. No. 135 of 1994 has been filed by United India Periodicals Pvt. Ltd. (''UIPL'') u/s 33 of the Arbitration Act,
1940 (''Act'') praying for declaration that arbitration clause contained in Clause 20 of the Agreement dated 14th March 1987 between Respondent
No. 1 Mahanagar Telephone Nigam Ltd. (''MTNL'') and UIPL does not subsist insofar as UIPL is concerned on account of events subsequent to
the said Agreement and for a declaration that an order dated 21st September 1994 issued by the Chairman-cum-Managing Director (''CMD'') of
MTNL appointing Justice K.S. Tiwana as Arbitrator is invalid, void and to no effect.
The connected O.M.P. No. 151 of 1996 is by MTNL u/s 28 of the Act praying for extension of the time for the Arbitrator to make and publish
the Award.
In terms of an Agreement dated 14th March 1987 (hereafter ''the Original Contract'') UIPL was awarded by MTNL the job of printing and
publishing five main telephone directories and five supplementary telephone directories for each of the two metropolitan cities, i.e., Bombay and
Delhi for the years 1987 to 1991. Clause 3.1 of the said Agreement read as under:
3.1 In consideration of permitting the contractor to publish the telephone directory together with advertisements on yellow pages as specified under
the general terms and conditions of the contract and strip advertisements at the bottom of the white pages of the telephone directory as specified
herein after the Contractor shall pay a royalty to MTNL over years at the rate specified hereunder:
Year Royalty For Delhi & Bombay Directories (Rs. In Crores)
1987 0.18
1988 0.36
1989 4.23
1990 5.22
1991 10.17
Total for 5 years 20.16
The Contractor shall also supply the under-mentioned quantities of the directories free of cost to the MTNL:
Directory Issue No. of Directories
Delhi Bombay
1987 6.00 7.00
1988 7.00 9.00
1989 8.25 10.05
1990 9.50 11.75
1991 11.00 13.05
In addition to the above quantities the Contractor shall supply the required corresponding number of supplementary directories free of cost to
MTNL also. The cost of any additional supplementary directories other than those mentioned hereinabove would be charged by the Contractors
as follows:
Delhi Bombay
Main (per copy) Supplementary perMain (per copy) Supplementary
page/10000 copies
per page/10000
copies
1987 25 180 30 180
1988 28 185 35 185
1989 32 190 37 190
1990 34 195 40 195
1991 35 200 45 200
It is agreed by the parties that the Contractor shall have no monetary claim in the manner in which MTNL disposes of or otherwise deals with the
Directories supplied to MTNL whether they be supplied free of cost or otherwise.
The Contractor shall, however, have the right to print additional directories and the right to sell to anybody including government, semi government,
public enterprises or private enterprises.
It was agreed that in consideration of publication the directories and procuring advertisement thereof UIPL would retain the entire advertisement
revenue on condition that in addition to free supply of specified number of directories UIPL would pay to MTNL fixed amounts by way of royalty
specified in the Agreement within ten days of the publication of the directories each year.
Appended to the Original Contract were ''Specific Terms and Conditions'' which, inter alia, contained the following clauses.
Without prejudice to the rights and remedies of the MTNL against any of the provisions of this contract or otherwise in law, if Contractor commits
any default or breach of the terms and conditions of this contract and/or fall in the due performance thereof within the time fixed by the contract
(which is the essence of the Contract) and do not complete the entire work on the stipulated due date, the MTNL shall be entitled to recover from
the contractor and the contractor hereby agrees to be bound to pay to the MTNL as and by way of compensation or liquidated damages an
amount calculated at the rate of Rs. 1,00,000/-for every day or part thereof of the delay beyond the stipulated date in respect of the item which is
not completed or finished and delivered completely in the MTNL on the stipulated date as mentioned in the contract and both the parties the end
and intent that all such liabilities shall be borne and discharged solely by the Contractor who shall keep indemnified the MTNL against the same.
...
All disputes or differences of any kind whatsoever arising out of or in connection with the contract, whether during the progress of the work after
its completion and whether before or after the determination of the contract, shall be referred by the Contractor to the MTNL and the MTNL shall
within reasonable time after their presentation make and notify decision thereon in writing. The decisions and directions with respect to any matters,
decision of which is specially provided for by these conditions given and made by the MTNL and agreed by the Contractor herein or by the
General Manager on behalf of the MTNL, which matters are referred to hereinafter as expected matters shall be final and binding upon the
Contractor and shall not be set aside or attempted to be set aside on account of any informality, omission, delay or error in proceeding in or about
the same or any other ground or for any other reason and shall be without appeal.
If the contractor is dissatisfied with decision of the MTNL on any matter in question, dispute or difference on any account or if the MTNL fails to
make a decision within a reasonable time then and in any such case, but except in any of the excepted matters referred to in the above para of
these conditions, the Contractor may within reasonable time but not exceeding 21 days of the receipt of communication of such decision take steps
to refer the matter in question, dispute or difference to arbitration under clause 20 hereinafter provided.
The work under the contract shall unless otherwise directed by the arbitrator be continued by the Contractor during the arbitration proceedings,
subject to other rights and remedies of the MTNL as provided in this contract.
Except in respect of Excepted matters referred to in clause 19 hereof, all questions, issues, disputes and differences between the MTNL and the
Contractor (whether relating to the Contractor''s claim against the MTNL or vice versa relating to any clause or provision of this contract) or any
interpretation thereof or the right or liability of any party or as to any act or omission etc. of either party whether arising during the course of the
work or after the completion or abandonment thereof, its termination, expiry or otherwise howsoever relating to this contract, shall be referred by
any aggrieved party to the contract (which terms will include the MTNL) to the sole arbitration of the Managing Director of the MTNL or his
nominee. It will be no objection to any such appointment that the arbitrator so appointed is a government servant on deputation with the MTNL or
the employee or the officer of the MTNL or that in the course of his duties as employee or the officer of the MTNL he had to deal with the matters
to which the contract relates or that he had expressed his views on all or any of the matters to dispute or difference. The arbitrator to whom the
matter is originally referred, on his being transferred or vacating his office or being unable to act, for any reason, the Managing Director of MTNL
shall designated any other person to act as arbitrator in accordance with the terms of the contract and such person shall be entitled to proceed with
the reference from the stage at which it was left by his predecessor. The award of the arbitrator so appointed shall be final, conclusive and binding
on all the parties to the contract and provisions of the Arbitration Act, 1940 or any statutory, modification or re-enactment thereof and the rules
made thereunder and for time being in force shall apply to the arbitration proceedings under this clause.
The award shall be made in writing and published by the arbitrator with six months after entering upon the reference or within such extended time
nor exceeding further four months as the sole arbitrator shall by a writing under his own hands extends.
The clause concerning assignment of the contract read as under:
Assignment of contract and change in constitution: The Contractor shall not assign to any third party the contract or any part thereof without the
prior written consent of MTNL, which may be given on such terms as MTNL in its discretion thinks fit. Where the contractors are a partnership
firm the previous approval, in writing, of the MTNL be obtained before any change is made in the constitution of the firm. Where the Contractor is
an individual or business concern, such an approval like-wise be obtained before the contractor enters into any partnership agreement where under
the partnership firm would have the right to carry out the work hereby undertaken by the contractor. If previous approval as aforesaid is not
obtained, the contract shall be deemed to have been assigned in contraventions of this clause and shall amount to a breach and the same action
may be taken and the same consequence shall ensure as provided in clause 22.
With a view to executing the job awarded to it under the Agreement dated 14th March 1987, UIPL on 3rd April 1987 floated another
company named United Data Base (India) Pvt. Ltd. (''UDI''), which was a wholly owned subsidiary of UIPL. UIPL assigned the original contract
to the UDI with the consent of the MTNL to the extent of the job of printing and publishing of the directories.
UIPL states that two main telephone directories for Delhi and one telephone directory for Bombay were printed and published by UIPL. Since
financial difficulties cropped up UIPL and UDI approached MTNL for an interest-free loan. Respondent No. 4 Sterling Computers Ltd. (''SCL'')
showed interest in diversifying into the field of printing and publishing of telephone directories and offered to print the balance number of telephone
directories. According to UIPL while the discussions for an interest-free loan were in progress, SCL was introduced as a party which could on its
own print and publish the balance number of telephone directories and that the proposal offered by SCL was accepted by MTNL.
A Memorandum of Understanding (''MoU'') was executed on 19th July 1991 between UIPL, UDI and the MTNL. The relevant clauses of the
said MoU read as under:
Following the liability of M/s UIP/UDI to print the 1989 issue (2nd issue) of MTNL Bombay telephone directory pursuant to the Contract
dated 14.3.1987 executed by UIP with MTNL which was subsequently assigned to UDI on 15th October 1987 the following arrangement was
reached by and between the parties after exchange of series of communications and discussions with their representatives from time to time.
Notwithstanding anything contrary to the agreement it was agreed that said understanding/agreement should be recorded in the following manner:
The contract mentioned herein shall include the said Contract with UIP read with the said assignment and this Memorandum of Understanding
(MOU) (and any formal Agreement to be executed by and between the parties hereto alongwith Sterling Computers Ltd., Principal Directory
Supplier, having their Registered Office at 19, Cathedral Garden Road, Madras-600034, hereinafter called ""Sterling"" (who are entrusted by
UIP/UDI to print and publish second issue of Bombay Telephone directories for MTNL) which expression shall, where the context so permits,
include their respective successors and assigns. Nothing herein contained shall constitute any partnership by and between the parties and the said
Sterling and the said UIP and UDI will have no power to assign their interest under the said Contract including this MOU nor the said Sterling shall
have such power except sub contracting printing and binding or directories on obtaining prior written permission from MTNL beforehand (and
which MTNL shall not unreasonably withhold) and each of the parties shall render mutual assistance to one another for fully implementing the
arrangement recorded herein including the execution of the said Tripartite Agreement, Deed of hypothecation, Affidavit and other documents
hereinafter mentioned and this MOU shall be read as supplemental to the Contract and except as what are expressly provided herein, the Contract
shall remain in full force and effect.
It is confirmed that UIP/UDI undertook the obligation of printing (complete in all respects) five main yearly issues and four supplements to be
published in between such yearly issues of the telephone directories for Bombay and Delhi each for the use and benefit of MTNL as recorded in
the Contract dated 14.3.1987. M/s. UIP/UDI have completed such printing job for Bombay to the extent of only one issue and one supplement.
The second issue of the Bombay directory is long overdue.
It is also confirmed that the said UIP and UDI had under the contract also agreed to procure their advertisement from the yellow pages and
white pages and covered by bold and additional entries and intended to be included in the said directories for which entire revenue earnings would
go the said Companies, but they would pay to MTNL an agreed royalty sum of Rs. 20.16 crores spread over five issues in addition to the free
supply of telephone directories/supplements to MTNL by the said Companies.
It is intention of the parties that MTNL should not, for the time being, resort to its legal rights as provided under law and/or the said contract
against the said Companies for their failure to print and publish the telephone directories and supply thereof to MTNL and to pay dues, if any, and
MTNL would assist the said Companies by rendering certain financial assistance and extending the period of such printing as recorded herein i.e.
Bombay 2nd issue as per Annexure-I, and remaining issues annually thereafter.
The said Companies shall complete the printing and publishing of at least 7 lakhs copies of Bombay telephone directories (2nd issue) through
Sterling as per Annexure-1 attached and time being deemed to be an essence of the Contract in this regard provided always that MTNL shall
open the letter of Credit for Rs. 6 crores (Rupees Six Crores only) in favour of Sterling to enable them to complete the said printing and
completion of all binding and other connected jobs for or in respect of the said seven lacs copies of telephone directories.
And MTNL shall at the cost of UIP/UDI have an unfettered authority, right of power to lift/collect the said seven lacs copies of the Bombay
telephone directories, from Sterling directly who will be entitled to collect their moneys from MTNL''s Bankers through whom the said letter of
Credit is opened. It is clearly agreed by and between the parties hereto that MTNL shall make such payments direct to Sterling against deliver of
the stipulated number of copies of telephone directories as per terms and conditions.
The parties hereto agree that if there is any problem for implementation of any provision herein contained, the same shall be referred to the
Chairman and Managing Director of MTNL by the parties concerned for ascertaining his opinion or judgement and which will be binding on the
parties hereto.
On the same date, i.e., 19th July 1991 a Tripartite Agreement was entered into between UIPL and UDI (collectively referred to as First
party), MTNL and SCL. The said Tripartite Agreement clearly mentioned that it was supplementary to the Original Contract dated 14th March
1987 as well as the MoU Dated 19th July 1991. It also referred to the fact that MoU dated 19th July 1991 had provided for execution of a formal
agreement to achieve the purpose mentioned therein. Clause 1 of the Tripartite Agreement read as under:
That all the terms and conditions and stipulations contained in the said Contract/Agreement of Assignment and Memorandum of Understanding
(whose true authenticated copies collectively from Annexure ''A'' hereto and shall be read as an integral part hereof) and obligations thereunder
reserved on the part of the First Party and the rights, privileges and powers provided for MTNL thereunder and under law shall be applicable or
available to and binding on the parties hereto as if the same are set out in this Agreement fully and which are not repeated herein to avoid prolixity.
Provided that if any provisions hereof/MOU are silent in regard to rights and powers of MTNL and the said parties of the First Part, the provisions
of contract will apply, provided that in the case of any inconsistency or contradictions, the stipulations contained in the Memorandum of
Understanding read with this Agreement shall prevail and have an overriding effect.
On 12th August 1991 an MoU was entered into between UIPL, UDI and SCL referring to the Agreement dated 19th July 1991 and reducing
the agreement into writing on ""the broad terms for implementation of the agreement and arrangements with MTNL...and for effecting printing and
publication of various directories under the contract with MTNL and DoT."" This MoU was contemporaneous with a meeting of the Negotiation
Committee of MTNL held on the same date with representatives of UIPL, UDI and SCL which dealt with the various issues that arose between
the parties as a result of the agreement including re-scheduling of the royalty to MTNL.
On 26th September 1991 a Supplemental Agreement was executed between UIPL and UDI (collectively referred to as parties of the First
Part), MTNL (party of the Second Part) and SCL (party of the Third Part) in terms of which ""subject to the stipulations contained in this
Agreement and the said Memorandum of Understanding read with the said contract, Sterling shall print and publish in a bound manner and from 13
main issues of the Delhi and Bombay directories (""the said two directories"") for the use and benefit of MTNL (in the manner agreed or to be
indicated to Sterling by MTNL) within a period of seven years including 1991"" on payment of additional royalty of Rs. 10 crores. This was in
addition to the royalty payable under the Original Contract dated 14th March 1987.
It requires to be noticed at this stage that the validity of the above Supplemental Agreement dated 26th September 1991 was challenged
before this. The decision dated 30th September 1992 of this Court in M and N Publications Ltd. and Another Vs. Mahanagar Telephone Nigam
Ltd. and Others, holding the said Supplemental Agreement to be invalid was affirmed by the Supreme Court in Sterling Computers Limited and
Others Vs. M and N Publications Limited and Others, . Therefore as far as the present case is concerned, the said Supplemental Agreement is to
no legal effect.
The present dispute arose with legal notices being sent by MTNL to UIPL, UDI and SCL on 3rd and 21st September 1994 calling upon them
to pay MTNL Rs. 22,87,67,203 being the money owed to it under Supplemental Agreement. By a subsequent notice dated 13th September 1994
the total sum demanded by MTNL under the Original Contract and all subsequent contracts was Rs. 56,18,32,919/-. On 21st September 1994
MTNL wrote to UIPL, UDI and SCL that under Clause 20 of the Agreement dated 14th March 1987 its CMD appointed Mr. Justice K.S.
Tiwana, a retired Judge of the Punjab and Haryana High Court to be the Sole Arbitrator for adjudicating the disputes and differences between the
parties.
UIPL filed the present Arbitration Petition No. 135 of 1994 in this Court on 24th October 1994. By an order dated 27th October 1994, this
Court while directing notice to issue directed that the Arbitrator would not, in the meanwhile, make the Award. The said interim order has
continued since then.
In the proceedings before the learned Arbitrator on 16th March 1996 it was noted that the term of the learned Arbitrator had expired on 7th
February 1996 and SCL had not agreed to the extension of the term. In the circumstances, on 22nd November 1996 MTNL filed OMP No. 151
of 1996 in this Court u/s 28(1) of the Act seeking extension of time for the learned Arbitrator to make and publish the Award.
At one stage, this Court was informed that Company Petition No. 118 of 1998 had been filed in this Court seeking the winding up of UIPL.
On 1st April 2008 an order was passed by the Company Court permitting the present two petitions to proceed.
On behalf of UIPL it was submitted by Mr. Rajiv Sawhney, learned Senior counsel, as under:
(i) On account of the subsequent agreements, Clause 20 of the Original Contract dated 14th March 1987 stood nullified. This was as a result of
the assignment of the work thereunder by UIPL to UDI with the consent of MTNL, followed by the MoU and Tripartite Agreement dated 19th
July 1991 and the further MoU dated 12th August 1991 between UIPL and UDI and SCL.
(ii) In terms of the Original Contract dated 14th March 1987 the decision taken by MTNL in relation to the subsequent agreements was an
''excepted matter'' and therefore a dispute resulting therefrom could not be referred to arbitration.
(iii) To the extent that the claims of MTNL related to non-payment of royalty from 1987 till 1991 they were barred by limitation and could not be
referred to arbitration.
(iv) With MTNL having filed a Suit No. 4628 of 1994 in the Bombay High Court, and the said suit having abated vis-a-vis UIPL and UDI,
MTNL must be held to have voluntarily abandoned the arbitration clause and waived its right to seek the reference of the dispute to arbitration.
Reliance was placed on the decisions in Food Corporation of India Vs. Sreekanth Transport, , General Electric Co. Vs. Renusagar Power Co.,
and Raj and Associates and Another Vs. Videsh Sanchar Nigam Limited and Others, . A splitting up of the causes of action was legally
impermissible. The present proceedings would be non-maintainable on the principle of res judicata. Reliance was placed on the decisions in Alka
Gupta Vs. Narender Kumar Gupta, , Kunjan Nair Sivaraman Nair Vs. Narayanan Nair and Others, , Deva Ram and Another Vs. Ishwar Chand
and Another, and Booz Allen and Hamilton Inc. Vs. SBI Home Finance Ltd. and Others, .
Countering the above submissions of Mr. Harish Malhotra, learned Senior counsel appearing for MTNL, submitted as under:
(i) The subsequent Agreements were in continuation of the Original Contract dated 14th March 1987 as was evident from the express wording of
the relevant clauses of the said Agreements.
(ii) MTNL consented to the assignment of the work by UIPL to UDI by its letter dated 24th April 1987 only on the condition that UIPL would
continue to be responsible for the performance of the contract. There was, therefore, no discharge of UIPL from its liability on account of any
subsequent Agreements.
(iii) The question of any of the claims of MTNL being barred by limitation was for the Arbitrator to decide. In fact the subsequent Agreements
contained clauses that amounted to acknowledgement of debt by UIPL and UDI arising from the Original Contract dated 14th March 1987.
Reliance was placed on the decision in Jai Chand Bhasin v. Union of India AIR 1983 Del 508.
(iv) The suit in the Bombay High Court was for recovery of the sums due for a subsequent period and had not abated vis-a-vis UIPL or UDI. The
present proceedings were not barred by res judicata. Relying on the decision in Indian Oil Corporation Ltd. Vs. SPS Engineering Ltd., it was
submitted that even this question ought to be left for the decision of the learned Arbitrator.
(v) The resolution of the disputes involving complicated questions of fact ought not be decided by the Court in the present proceedings.
Mr. Malhotra pointed out that the earlier learned Arbitrator appointed by this Court expired in the first week of December 2010 and therefore
exercising its powers u/s 20 of the Act this Court should appoint another Arbitrator in his place for resumption of the arbitration proceedings
before the new Arbitrator. Responding to this last submission Mr. Rajiv Sawhney, learned Senior counsel for the Petitioner stated that in the event
this Court rejected the plea of UIPL then it would have no objection to the Court appointing an Arbitrator in place of late Justice Tiwana.
The principal contention of UIPL is that on account of the agreements and MoUs subsequent to the Original Contract it stood discharged of its
liabilities and that as far as it was concerned even the arbitration clause of the Original Contract could not be invoked by MTNL. A plain reading
of the relevant clauses of the agreements and MoUs that followed the Original Contract, and which have been extracted hereinbefore, belie this
contention. For instance, Clause 2 of the MoU dated 19th July 1991 stated that ""this MOU shall be read as supplemental to the Contract and
except as what are expressly provided herein, the Contract shall remain in full force and effect."" Clause 1 of the Tripartite Agreement of the same
date also emphasised that all the terms and conditions and stipulations contained in the Original Contract, the MoU and Agreement would continue
to be ""binding on the parties hereto as if the same are set out in this Agreement fully"". Under the proviso to the said Clause the said agreement was
to prevail only if there was any inconsistency between its clauses and those of the Original Contract. The contemporaneous correspondence
between MTNL and UIPL reveals that the parties intended the rights and obligations flowing from the Original Contract dated 14th March 1987
to continue. The Agreements and MoU dated 19th July 1991 or the Agreement of 12th August 1991 were not in that sense independent ''stand
alone'' agreements but in continuation of the Original Contract dated 14th March 1987. Consequently there was no question of UIPL being
relieved of the binding effect of the arbitration clause of the Original Contract. This Court, therefore, rejects the principal plea of UIPL that it stood
discharged of its liabilities on account of the agreements subsequent to the Original Contract and, therefore, cannot be made a party to the
arbitration proceedings.
The plea that the decision of the MTNL to permit assignment by UIPL of the work under the Original Contract to UDI is an ""excepted matter
is without merit. The relevant clause defines ""excepted matters"" as ""decisions and directions with respect to any matters, decision of which is
specially provided for by these conditions given and made by the MTNL and agreed by the Contractor herein or by the General Manager on
behalf of the MTNL."" But this has to be read in the context of the correspondence between the parties which makes MTNL''s consent to the
assignment conditional upon UIPL continuing to be liable. For instance in its letter dated 24th April 1997 addressed to UIPL, MTNL
unambiguously states that ""as far as the MTNL is concerned the complete responsibility of the due and proper performance of the contract of
publishing the Delhi and Bombay directories shall rest with M/s. UIP only."" Then there are the agreements and MoUs subsequent to the Original
Contract which do not discharge UIPL from its liabilities. Prima facie it does not appear that the disputes that have arisen as a result of the legal
notices issued to UIPL and the others by MTNL can be considered to be ''excepted matters''. The final decision in this regard will of course be
that of the Arbitrator.
The papers concerning Suit No. 4628 of 1994 filed by MTNL in the Bombay High Court have been placed on record. In para 5 of the plaint
it is stated that ""the Plaintiffs are raising a separate claim against the defendants and initiating arbitration proceedings in view of the arbitration clause
contained in the agreement dated 14.3.1987."" Again in para 15 of the plaint MTNL has confined its claim up to the stage of the execution of the
Agreement dated 26th September 1991, ""viz., bringing of 1992 Edn. of the directories by the defendants."" Prima facie there appears to be no
overlapping of the claims that form the subject matter of the arbitration proceedings and those that form part of the suit. The plea of splitting of the
claims also does not, for the same reason, prima facie appear to be tenable. As explained in Indian Oil Corporation v. SPS Engineering Ltd.
(supra) in the context of Section 11 of the 1996 Act, which would equally apply to the exercise that the Court performs u/s 20 of the Act, such an
issue would have to be examined by the Arbitrator. The decisions cited by learned Senior counsel for the Petitioner are distinguishable on facts and
do not assist his case.
The further plea that the said suit stood automatically dismissed by the order dated 15th September 1999 of the Bombay High Court is also
not correct. The said order reads as under:
S. 4628-94
Miss J.N. Pandhi, i/b S.I..Sah & Co., Advs. for the Plffs.
Miss. G. Nair, i/b Mnair, & Associates, Advs. for Deft. 1.
Defts. 2 & 3 not served.
P.C: on the appln. of Miss Pandhi, returnable date of the Writ of Summons is against Defts. 2 & 3 is extended by 12 weeks from today. If the writ
of Summons as against them is not served within the aforesaid period, Suit as against them to stand dismissed, automatically, for non-prosecution.
On the appln. of Miss Nair, adjd. For 12 wks. For W/S for Deft. 1.
Thereafter, on 8th December 1999 the matter was adjourned for four weeks ""for instructions regarding service against Defts. 2 & 3 who are
under liquidation."" On 9th June 2000 the suit against SCL was transferred to the list of long causes and the suit against the remaining defendants
were adjourned to enable the plaintiff, i.e., MTNL to adopt proceedings against Defendant Nos. 2 and 3 who were stated to be under liquidation.
Therefore, it is not correct to say that Suit No. 4628 of 1994 stood automatically dismissed in terms of the order dated 15th September 1999.
As regards the plea of UIPL that MTNL''s claims concerning the royalties for the years 1987 to 1990 are barred by limitation, there is merit in
the contention of Mr. Malhotra that this aspect too requires to be decided by the learned Arbitrator. The decision in Jai Chand Bhasin v. Union of
India rendered in the context of Section 20 of the Act supports this position. The Agreements and the MoUs subsequent to the Original Contract
14th March 1987 refer to the outstanding liability of UIPL, UDI and SCL thereunder and prima facie could be said to be an acknowledgement of
the said liability even as of 1991. Whether this would in fact save the claim of MTNL from the bar of limitation would be a question which will be
decided by the Arbitrator in terms of the evidence led by the parties and a detailed scrutiny of the Agreements and MoUs in question.
The conclusion of the Court, as a result of the above discussion, is that there does exist a valid arbitration Clause 20 in terms of which disputes
between UIPL and MTNL can be referred to arbitration. The plea of UIPL for a declaration that letter dated 21st September 1994 issued by the
CMD, MTNL appointing the Arbitrator to be invalid is hereby rejected. The appointment of the Arbitrator by MTNL invoking Clause 20 of the
Original Contract dated 14th March 1987 was valid.
Considering that more than seventeen years have elapsed since MTNL invoked the arbitration clause, and taking note of the submission of Mr.
Rajiv Sawhney, learned Senior counsel for the Petitioner, that in the event of the Court rejecting the plea of UIPL, it would have no objection to
the Court appointing an Arbitrator in place of late Justice Tiwana who expired in the first week of December 2010 during the pendency of these
petitions, this Court in exercise of its powers u/s 20 of the Act, appoints Mr. Justice J.M. Malik (retired), C-I/67, Bapa Nagar, New Delhi-
110003 as the Arbitrator to adjudicate the dispute between the parties. The fees of the learned Arbitrator will be in terms of the Delhi High Court
Arbitration Centre (Arbitrators'' Fees) Rules. MTNL is permitted to collect the entire arbitral record that may be available in the residence/office of
late Justice Tiwana and deposit it with Justice Malik the Arbitrator appointed by this Court who will, as far as is practicable, resume the
proceedings from the stage at which it was when this Court stayed them. The time for making and publishing the Award is extended by one year
from today.
O.M.P. No. 135 of 1994 is dismissed and O.M.P. No. 151 of 1996 is disposed of in the above terms.