HIMACHAL PRADESH MAHILA VIKAS NIGAM Vs. JERATH ELECTRONICS

JUDGEMENT

(1.) THESE two applications, under Section 34 of the Arbitration and Conciliation Act, 1996, are being disposed of together, as the same award, i.e. award dated 17.3.2005 given by the Financial Commissioner-cum-Secretary (Revenue & Appeals), Himachal Pradesh, who had been appointed as such by the Nominee Judge of the Hon'ble Chief Justice, under Section 11(6) of the Arbitration and Conciliation Act,1996, on a petition filed by M/s Jerath Electronics and Allied Industries Pvt. Ltd. (respondent in Arbitration Case No.51 of 2005 and applicant in Arbitration Case No.53 of 2005) has been challenged thereby.

(2.) FIRST , the facts necessary for comprehending the questions involved may be noticed. H.P. Mahila Vikas Nigam (applicant in Arbitration Case No.51 of 2005 and respondent in Arbitration Case No.53 of 2005), hereinafter referred to as Nigam, made certain Bye-Laws, called 'Himachal Pradesh Mahila Vikas Nigam Bye-Laws for Financial Assistance, 1989'. Clause 5(b) of these Bye-Laws (repealed since 1992) provided that the Nigam would grant 4% relief on total investment made by a unit on a project, by way of subsidy, in a particular financial year if the unit provided employment to women to the extent of atleast 60% in that particular financial year and the number of total employees in that unit was not less than six, on an application made on Form-A-IV. Clause 17 of these Bye-Laws provides that in case of any dispute arising out of any provision or in any way touching or concerning the Bye-Laws, whatsoever, the matter shall be referred to the sole arbitration of the Secretary (Welfare) to the Government of Himachal Pradesh or his nominee acting as such at the time of the reference. M/s Jerath Electronics and Allied Industries Pvt. Ltd., hereinafter referred to as the Unit, claiming to have set-up a unit, wherein more than 60% women were employed during the years 1990-91 and 1991-92, laid claim for subsidy at the rate of 4% per annum, for the aforesaid two years, on the total investment made by it. The claim remained pending for quite some time and ultimately it was rejected on 11.9.1998 by the Financial Commissioner-cum- Secretary (Welfare) to the Government of Himachal Pradesh, through communication of that date addressed to the Unit. The Unit made an application to the Hon'ble Chief Justice, under Section 11(6) of the Arbitration and Conciliation Act, for appointment of an Arbitrator, because the Arbitrator, named in the Bye-Laws, i.e. Clause 17 thereof, had dealt with the claim of the Unit and rejected the same, vide communication dated 11.9.1998, in exercise of administrative powers.

(3.) THE Nominee Judge of the Hon'ble Chief Justice held that there was an implied agreement, because the provision of Clause 5(b) of the Bye-Laws of the Nigam was in the form of an open offer and anybody by setting-up a unit employing more than 60% women could accept that offer and make an application, on the prescribed form, to claim subsidy at the rate mentioned in Clause 5(b) of the Bye-Laws. The Nominee Judge of the Hon'ble Chief Justice further held that there existed a dispute referable for arbitration. The question of limitation was left open. Consequently, the application was allowed and Financial Commissioner-cum- Secretary (Revenue & Appeals), Himachal Pradesh, was appointed as Arbitrator.