Special Leave Petition Civil No 4221 of 1988
From the Judgment and Order dated 3121987 of the Delhi High Court in FAO OS No 120 of 1987
Mukul Rohtagi and Miss Bina Gupta for the petitioner
Soli J Sorabji DK Sorab P Jain Sushil Kr
Jain and Sudhanshu Atreya for the Respondent
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
This is an application for leave to appeal under Article 136 of the Constitution from the order of the Division Bench of the Delhi High Court affirming the order of the learned single Judge of that High Court
It appears that on 19th March 1983 there was an agreement for distribution of the film Savere Wali Gadi entered into between the parties the petitioner as the distributor and the respondent as the producer
The agreement contained an arbitration clause
It is stated that a sum of Rs3 lakhs was paid by the petitioner and acknowledged by the respondent earlier to the execution of the said agreement and therefore the first instalment payable under the agreement to the respondent of Rs340 lakhs was deemed to be adjusted
Under the aforesaid distribution agreement by 30th August 1983 the respondent was to hand over the prints of the film by this date which he never did
In or about 1984 certain other moneys of about Rs3 lakhs were further advanced to the respondent
On 11th March 1985 a further agreement was entered into between the parties whereby the respondent agreed to pay a total amount of Rs650 lakhs to the petitioner and the petitioner to give up his distribution rights in the first agreement of 19th March 1983
The first agreement was accordingly irrevocably cancelled and superseded by this subsequent agreement
On or about 2nd June 1985 respondent wrote to the Motion Pictures Association Delhi to de register the film in the name of the petitioner in view of the petitioner having given up the distribution rights by virtue of Annexure P2 dated 11385 where under the petitioner had agreed to receive Rs650 lakhs and finished the deal within six months of 11385
It is the case of the petitioner
530 however that the sum of Rs650 lakhs was never paid by the respondent to the petitioner
On 3rd July 1985 the Motion Picture Association wrote to the respondent acknowledging receipt of respondent s letter dated 22nd June 1985 whereby he had asked for de registration of the film in view of Annexure P2
The Motion Picture Association stated that de registration would be allowed only when the respondent pays Rs650 lakhs to the petitioner or deposits the amount with the Motion Picture Association
It is stated that between July 1985 and September 1985 the petitioner wrote two letters to the Motion Picture Association stating that the respondent had committed a breach of the subsequent agreement dated 11th March 1985 executed between the parties whereunder the respondent was to make payment of Rs650 lakhs and it was clear that the respondent had no desire to make payment and the respondent wrongly wanted to deal with the film and sell the distribution rights to somebody else thereby enjoying benefit of the same and also to deprive the petitioner of the amount of Rs650 lakhs
Civil suit was filed in February 1986 for recovery of Rs650 lakhs with interest by the petitioner against the respondent
The written statement was submitted
An application was made under section 20 in June 1986
This application had been made later than the institution of the civil suit in the same High Court
The learned single Judge directed that the arbitration agreement to be filed and reference was directed according to the agreement
There was an order passed by the learned single Judge to that effect
There was an appeal to the Division Bench of the High Court and the Division Bench confirmed the order of the learned single Judge
Hence this petition
It appears that there were two agreements one dated 11th March 1985 and the other dated 19th March 1983
The learned Judge found that there could be little doubt that the intention of the parties when agreement dated 11th March 1985 was entered into was that the earlier contract dated 19th March 1983 should be superseded
But it appears that the agreement fell through because when the agreement of 1985 was entered into it was the intention of the parties to the earlier agreement would be superseded and a new arrangement was sought to be brought about whereby the rights of the petitioner herein under agreement dated 19th March 1983 were to be yielded for a sum of Rs650 lakhs
This amount of Rs650 lakhs was never paid by the respondent
It was the case of the petitioner herein that thereby the agreement of 11th March 1985 stood cancelled
The petitioner who claimed rights under the earlier agreement dated 19th March 1983 and sought the continuation of his registration of distributorship
The learned single Judge found that it was at the instance of petitioner 531 herein that respondent No 2 confirmed vide its letter dated 19th September 1985 that as the petitioner before the learned single Judge had failed to pay Rs650000 the aforesaid picture stood registered in the name of the petitioner herein
This registration could continue only by virtue of the earlier agreement dated March 19 1983
The learned single Judge further found that the agreement dated 11th March 1985 had come to an end and the earlier agreement dated 19th March 1983 had revived
In this connection reference may be made to the observations of the Patna High Court in Babulal Marwari and others vs Tulsi Singh and others AIR 1940 Patna 121
Whether in any particular case there was a complete novation of a contract in the sense that the new contract replaced or substituted the old contract could depend upon the facts and circumstances of the case
In that view of the matter the single Judge of the High Court in our opinion rightly directed that the first agreement be filed
The Division Bench of the High Court pointed out after referring to the letter dated 1921st September 1985 the Motion Pictures Association confirmed that in view of the failure of the producer to comply with his earlier letter regarding payment of Rs 650 lakhs plus interest the picture in question stood registered in the name of Ms Raja Movies in the Motion Pictures Association
This position was accepted by Suyog Films in the letter dated 5th November 1985 and the subsequent letter by them
The non performance of the terms of the contract dated 11th March 1985 may not by itself revive the earlier contract of 19th March 1983 but the petitioner in his letters dated 15th July 1985 and 19th September 1985 fell back on the original contract of 19th March 1983
This was accepted by Ms Suyog Films and thus a binding contract came into existence
In this case the Division Bench came to the conclusion on the construction of the letters and the conduct of the party that the contract dated 19th March 1983 continued
The contract dated 19th March 1983 contained an arbitration clause
There is no reason why that arbitration agreement should not be filed
A civil suit had been filed but that by itself unlike under section 34 of the does not preclude filing of proper arbitration agreement between the parties
There being no impediment in filing the arbitration agreement which indubitably was subsisting at the relevant time when the High Court directed that the arbitration agreement be filed that discretion should not be interfered with
Section 20 of the provides as follows 20
Application to file in Court arbitration agreement 532 1 Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject matter of the agreement or any part of it and where a difference has arisen to which the agreement applies they or any of them instead of proceeding under Chapter II may apply to a Court having jurisdiction in the matter to which the agreement relates that the agreement he filed in Court
2 The application shall be in writing and shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder is defendant or defendants if the application has been presented by all the parties or if otherwise between the applicant as plaintiff and the other parties as defendants
3 on such application being made the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants requiring them to show cause within the time specified in the notice why the agreement should not be filed
4 Where no sufficient cause is shown the Court shall order the agreement to be filed and shall make an order of reference to the arbitrator appointed by the parties whether in the agreement or otherwise or where the parties cannot agree upon an arbitrator to an arbitrator appointed by the Court
5 Thereafter the arbitration shall proceed in accordance with and shall be governed by the other provisions of this Act so far as they can be made applicable
 It is significant to note that the sub section 1 gives an option to the parties by the use of expression may  but the other sub section if the conditions are fulfilled makes it obligatory for the Court to direct filing of an arbitration agreement
Indubitably in this case there was an arbitration clause in the agreement
The parties have applied for reference
The Division Bench has reiterated that the original agreement dated 19th March 1983 which ceased to have effect and came to an end by the agreement dated 11th March 1985 stood revived by virtue of the two letters dated 15th July 1985 and 11th September 533 1985 by the appellant
The High Court has confirmed that the said two letters were acted upon by the Motion Pictures Association
By letter dated 1921 September 1985 the Motion Pictures Association confirmed that in view of the failure of the producer to comply with his earlier letter regarding payment of Rs650000 plus interest the picture Savere Wali Gadi stood registered in the name of Ms Raja Movies in the Motion Pictures Association
This position was accepted by Suyog Films in letter dated 5th November 1985 and the subsequent letter by them
It is clear that the petitioner in his letters dated 15th July 1985 and 11th September 1985 fell back on the original contract of 19th March 1983
This was accepted by the respondent
Hence there was at all relevant times a valid and binding contract between the parties
That contract contained an arbitration clause
There was nothing in view of the reasons indicated above to disentitle the parties to have their rights adjudicated in terms of an arbitration clause
In the premises the High Court was right in the view it took
This petition fails and is accordingly dismissed
GN Petition dismissed


Summary:
The Education Department of the State of Haryana which was administering Adult Education Centres for providing functional literacy to illiterates in the age group of 15 35 years and Non Formal Education Centres to impart learning by Special Contact Courses to student drop outs from schools in the age group of 6 15 years appointed the petitioners as supervisors from time to time since the years 1978 on a fixed salary and continued to treat them as temporary gov ernment servants by giving them a deliberate break in serv ice of one day after the lapse of every six months
Contend ing that this was violative of articles 14 and 16 since they were discharging similar duties as other Supervisors such as respondents 2 6 in the Education Department who had been absorbed as regular government servants the petitioners prayed for issue of a Writ directing the State Government to give them the same scale of pay and benefits of continuous service etc
by declaring them to be permanent government servants
The State Government contended that the petitioners were not full time employees that their mode of recruitment was different from the mode of recruitment of regular Supervi sors that the nature of functions discharged by them was different from those of the latter and that they had been appointed on six monthly basis as the posts were sanctioned from year to year in view of the temporary nature of the schemes
The documentary evidence placed on record established that the petitioners were functioning as full time Supervi sors and had been 715 given the status equivalent to masters of formal schools and their functions were also like the Block Education Officers of formal schools
Allowing the petition partly HELD The petitioners are entitled to be paid on the same basis of same pay scale as per which respondents 2 to 6 who are discharging similar duties as Supervisors just like the petitioners are being paid
i The Respondent State has failed to establish its plea that the nature of the duties are different
In the regular cadre the essential qualification for appointment is BA BED
Petitioners also possess the same qualification viz BA BED
In fact many of them even possess higher degrees such as MA MED
In what manner and in what respect are the duties and functions discharged by those who are in the regular cadre different The petitioners having discharged the initial burden of showing similarity in this regard the burden is shifted on the Respondent State to establish that these are dissimilar in essence and in substance
We are unable to uphold the bare assertion made in this behalf by the State of Haryana in its Counter affidavit
723F G ii So long as the petitioners are doing work which is similar to the work performed by respondents 2 to 6 from the stand point of Equal work for equal pay  doctrine the petitioners cannot be discriminated against in regard to pay scales
Whether equal work is put in by a candidate select ed by a process whereat candidates from all parts of the country could have competed or whether they are elected by a process where candidates from only a cluster of a few vil lages could have competed is altogether irrelevant and immaterial for the purpose of the applicability of Equal work for equal pay  doctrine
A typist doing similar work as another typist cannot be denied equal pay on the ground that the process of selection was different inasmuch as ultimately the work done is similar and there is no rational ground to refuse equal pay for equal work
It is quite possible that if he had to compete with candidates from all over the country he might or might not have been selected
It would be easier for him to be selected when the selection is limited to a cluster of a few villages
That however is altogether a different matter
It is possible that he might not have been selected at all if he had to compete against 716 candidates from all over the country
But once he is select ed whether he is selected by one process or the other he cannot be denied equal pay for equal work without violating the said doctrine
723B E iii Whether appointments are for temporary periods and the Schemes are temporary in nature is irrelevant once it is shown that the nature of the duties and functions discharged and the work done is similar and the doctrine of Equal pay for equal work  is attracted
724B C iv The petitioners have been appointed in the context of a Scheme which is by the very nature of things transient and temporary
No doubt it has been extended from year to year
But by the very nature and scope of the scheme once the objective of Adult Education is accomplished in the sense that the illiterate adults of the cluster of villages become literate pursuant to the education imported at the centres the need for adult education would diminish progressively and ultimately cease
Having regard to these facts and circumstances we do not think that the Respondent State can be accused of making appointments on a temporary six months  basis with any ulterior or oblique motive
In our opinion therefore the prayer of the petitioners to absorb them as regular employees on a permanent basis from the date of their initial appointment has no justification
That however does not mean that the petitioners should be deprived of the legitimate benefits of being fixed in a pay scale corre sponding to the one applicable to respondents 2 to 6 by treating them as employees who have continued from the date of initial appointment by disregarding the breaks which have been given on account of the peculiar nature of the Scheme
While therefore the petitioners cannot claim as a matter of right to be absorbed as permanent and regular employees from the inception they would be justified in claiming pay on the basis of the length of service computed from the date of their appointment depending on the length of service by disregarding the breaks which have been given for a limited purpose
Having regard to the facts and circumstances of the present case ends of justice would be met if the petition ers are paid the difference in salaries with effect from the date of the institution of the Writ Petition viz September 18 1985
But it will be convenient to direct the implemen tation with effect from September 1 1985725B G 726A B 717