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2014 Supreme(Del) 2313
High Court of Delhi
RAJIV SHAKDHER, J.
Shishir Gupta & Another
Versus
Air India Limited
ARB. P. Nos. 431, 434 of 2012
Decided on: 28-10-2014
For the Petitioners:Kaustabh Sinha, Virender Negi, Jitin Sahai, Naveen Gaur, Advocates.
For the Respondents:Mudit Sharma, Tanmaya Nirmal, Advocates.
The main legal point established is that disputes falling within the wide connotation of 'interpretation' in an arbitration agreement should be referred to an arbitrator for adjudication.
Headnote:
Arbitration - Service Agreement - Arbitration and Conciliation Act, 1996, Section 11(6)
Fact of the Case:
The petitioners, Mr. Gupta and Mr. Bharadwaj, were appointed as Trainee Pilots and subsequently as First Officers by Air India Ltd. They executed agreements including Service Agreement, joint fixed deposit, surety bond, and loan agreement. Disputes arose when they faced delays in receiving emoluments and were denied promotions. They tendered resignations, which were not accepted by the respondent, leading to legal proceedings.
Finding of the Court:
The court found that there were disputes between the parties regarding salary, allowances, promotions, and the legitimacy of the respondent's claims. The court held that these disputes fell within the scope of the arbitration agreement in the Service Agreement and appointed an arbitrator to adjudicate the matters.
Issues: The issues revolved around the interpretation of the Service Agreement, legitimacy of the respondent's claims, and the enforceability of the arbitration agreement.
Ratio Decidendi: The court determined that the disputes fell within the scope of the arbitration agreement, despite the respondent's contention that the disputes were not arbitrable. The court emphasized the wide connotation of 'interpretation' and held that the arbitrator should determine the scope and ambit of the arbitration clause.
Final Decision: The court appointed an arbitrator to adjudicate the disputes and disposed of the petitions with no orders as to costs.
Rajiv Shakdher, J.
1. These are the petitions filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (in short the Act) against a common respondent i.e., Air India Ltd.
2. The respondent is resisting the appointment of arbitrator in the matter broadly on two grounds : First, that there is no dispute obtaining between the parties which, requires adjudication. Second, the arbitration agreement on which reliance is placed by the petitioners before this court is restricted to the ‘interpretation’ of that particular agreement, that is, the service agreement obtaining between the parties and thus, does not encompass within its ambit, disputes adverted to in these petitions.
3. Before I proceed further, it may be relevant to broadly sketch out the necessary facts relevant for adjudicating the captioned petitions :-
FACTS PERTAINING TO ARB. P.431/2012
3.1 The petitioner, in this case, hereinafter referred to as Mr. Gupta, was appointed as a Trainee Pilot on 13.02.2007. On his appointment, Mr. Gupta executed five (5) agreements with the respondent of even date i.e., 27.02.2007. These agreements are titled as follows :-
(i) Service Agreement;
(ii) Agreement for joint fixed deposit;
(iii) Surety bond for Service Agreement;
(iv) Loan agreement; and
(v) Surety bond for loan agreement (hereinafter collectively referred to as the agreements).
3.2 Upon completion of training, Mr. Gupta was appointed as a Second Officer vide appointment letter dated 28.04.2009 with effect from 02.04.2008. Thereafter, Mr. Gupta was appointed as a First Officer vide appointment letter dated 11.05.2009, this time with effect from 15.04.2008. Mr. Gupta’s appointment was confirmed as First Officer vide a communication dated 09.10.2009 issued by the respondent.
3.3 It is not in dispute that in terms of the agreement for joint fixed deposit, a fixed deposit in the sum of Rs.7.50 Lakh was created by Mr. Gupta.
3.4 According to Mr. Gupta, his grievances vis-a-vis the respondent came to fore when from May, 2010, there was a continuous delay encountered in receipt of monthly emoluments, that is, his salary and flying allowance. Mr. Gupta’s grievance in a sense multiplied when, he was not promoted to the Captain’s Grade despite him having apparently achieved the necessary qualifications in terms of respondent’s internal office letter dated 23.01.2004. The aforesaid, coupled with reduction in flying hours which, necessarily impacted, Mr. Gupta’s emoluments, led him to ultimately tender his resignation as, his grievances were not addressed. In so far as the promotion aspect was concerned, Mr. Gupta had brought this, to the notice of the respondent vide communication dated 30.06.2011.
3.5 Having regard to these circumstances and also the fact that Mr. Gupta had spent huge amount, that is, USD 35000 in obtaining necessary training with an entity, known as, M/s. Cloud Dancers Aviation Inc., Florida, USA, he decided to tender his resignation. Accordingly, a letter dated 19.07.2011 was submitted by Mr. Gupta indicating therein his desire to resign from the services of the respondent with effect from 20.08.2011. In this letter, Mr. Gupta made reference to his aforementioned grievances. Mr. Gupta therefore, by this letter, not only asked for acceptance of his resignation but also sought issuance of a ‘No Objection Certificate’ and waiver of the notice period of six (6) months by the competent authority. Release of the fixed deposit of Rs.7.5 Lakh was also sought.
3.6 The respondent in reply, issued two communication dated 28.07.2011 and 10.08.2011 whereby, it was broadly indicated to Mr. Gupta that his resignation was under consideration and that, till such time he should continue with his services.
3.7 The aforementioned letters of the respondent were followed by yet another letter dated 11.08.2011. By this letter, the respondent essentially informed Mr. Gupta about the fact that he had executed various agreements and surety bonds (to which I have already made a referenc
