1996 (7) TMI 581 - SC - Indian Laws

Summary

Issues Involved:
1. Arbitrability of the dispute under the Electricity Act and the Supply Act.
2. Jurisdiction of the civil court to decide the existence or validity of the arbitration agreement.
3. Applicability of Section 52 of the Electricity Act and Section 76(2) of the Supply Act.
4. Applicability of Section 46 read with Section 33 of the Arbitration Act.

Detailed Analysis:

1. Arbitrability of the Dispute:
The primary issue was whether the disconnection of electrical supply and the resultant damages claimed by the respondent are arbitrable under the provisions of the Electricity Act or the Supply Act. The appellant contended that these matters are not arbitrable under either Act. The Court noted that the right to claim damages for disconnection does not arise under Section 19(1) of the Electricity Act, which deals with compensation for damage caused during the execution of works. Therefore, the dispute over damages due to disconnection is not arbitrable under Section 52 of the Electricity Act or Section 76(2) of the Supply Act.

2. Jurisdiction of Civil Court:
The Court examined whether the civil court has jurisdiction to decide the existence or validity of the arbitration agreement. It was contended that by operation of Section 46 read with Section 33 of the Arbitration Act, the dispute would be arbitrable, and the civil court would lack jurisdiction. The Court clarified that Section 33 of the Arbitration Act gives power to the civil court to decide the existence or validity of the arbitration agreement. The arbitrator cannot conclusively decide this jurisdictional issue. Therefore, the civil court has jurisdiction to determine the existence and validity of the arbitration agreement.

3. Applicability of Section 52 of the Electricity Act and Section 76(2) of the Supply Act:
The Court analyzed whether the dispute falls under any provisions of the Electricity Act or the Supply Act that direct matters to be determined by arbitration. It was concluded that the damages claimed due to disconnection do not fall under the arbitrable disputes mentioned in Section 19(1) of the Electricity Act or the relevant sections of the Supply Act. Consequently, Section 52 of the Electricity Act and Section 76(2) of the Supply Act do not apply to this dispute.

4. Applicability of Section 46 read with Section 33 of the Arbitration Act:
The Court addressed the contention that Section 46 of the Arbitration Act, which applies to statutory arbitrations, would make the dispute arbitrable. Section 46 states that the provisions of the Arbitration Act apply to statutory arbitrations unless inconsistent with the other enactment. The Court found that the scheme under the Electricity Act and the Supply Act is inconsistent with the Arbitration Act regarding this dispute. Therefore, Section 46 does not apply, and the dispute is not arbitrable under the Arbitration Act.

Conclusion:
The Supreme Court allowed the appeal, setting aside the decrees of the lower courts and decreeing the suit as prayed for by the appellant. The Court held that the dispute over damages due to disconnection is not arbitrable under the Electricity Act or the Supply Act, and the civil court has jurisdiction to decide the existence and validity of the arbitration agreement. The appeal was allowed without costs.