ANDHRA BANK Vs. UNION OF INDIA

JUDGEMENT

(1.) . Rule.

(2.) . With the consent of parties, the writ petition is taken up for final disposal. The petitioner, the Andhra Bank, is a Public Sector Bank having its Head Office at Hyderabad. The respondent is the Indian Airlines Ltd. Both are the Public Sector Enterprises. A dispute arose between the petitioner Bank and the Indian Airlines with respect to grant of Credit Card facilities for ticketing of the Indian Airlines. The petitioner Bank had a claim on the Indian Airlines and the Indian Airlines had a counter claim on the petitioner Bank.

(3.) . By a letter dated 29.03.1989 issued by the Secretary, Department of Public Enterprises, Ministry of Industry, New Delhi, as regards commercial disputes between the Public Sector Enterprises inter-se as well as between Public Sector Enterprises and Government Departments, it was indicated that such disputes be settled through arbitration. In the letter it is noted that after considering the note dated 08.05.1987 prepared by the Department of Legal Affairs, the Committee of Secretaries in its meeting held on 26.06.1987 suggested that a Permanent Machinery of Arbitration should be set up to settle all commercial disputes between Public Sector Enterprises inter-se as well as between a Public Sector Enterprise and a Government Department. In this regard, it was pointed out in paragraph 2 of the said letter that the Articles of Association of respective enterprises or the relevant provisions of the Acts creating the statutory corporations should include an arbitration clause in the form prescribed in 'Annexure-I' to the letter. The clause suggested to be included reads as under: