Full Judgement
Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd.
Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd.
Jindal Exports Limited Vs. Fuerst Day Lawson
Ite India P. Ltd. Vs. Mukesh Sharma & Ors.
Shivnath Rai Harnarain India Company Vs. Glencore Grain Rotterdam Tinna
Finex Ltd. Vs. National Ability S.A. & Anr.
Sea Stream Navigation Ltd. Vs. Lmj International Ltd.
J U D G M E N T
AFTAB ALAM, J.
1. Leave granted in SLP (C) No.31068 of 2009 and SLP (C) No.4648 of 2010.
2. The common question that arises for consideration by the Court in this batch of cases is whether an order, though not appealable under section 50 of the Arbitration and Conciliation Act, 1996 (hereinafter "1996 Act"), would nevertheless be subject to appeal under the relevant provision of the Letters Patent of the High Court. In other words even though the Arbitration Act does not envisage or permit an appeal from the order, the party aggrieved by it can still have his way, by-passing the Act and taking recourse to another jurisdiction.
3. Mr. C.A. Sundaram, senior advocate, however, who led the arguments on behalf of the appellants, would like to frame the question differently. He would ask whether there is any provision in the 1996 Act that can be said to exclude the jurisdiction of the High Court under its Letters Patent either expressly or even impliedly. He would say that the jurisdiction of the High Court under the Letters Patent is an independent jurisdiction and as long as the order qualifies for an appeal under the Letters Patent an appeal from that order would be, undoubtedly, maintainable before the High Court.
4. A correct answer to both the questions would depend upon how the 1996 Act is to be viewed. Do the provisions of the 1996 Act constitute a complete code for matters arising out of an arbitration proceeding, the making of the award and the enforcement of the award? If the answer to the question is in the affirmative then, obviously, all other jurisdictions, including the letters patent jurisdiction of the High Court would stand excluded but in case the answer is in the negative then, of course, the contention of Mr. Sundaram must be accepted.
5. The batch presently before the Court originally consisted of nine cases, out of which SLP (C) No.16908 of 2010 ended in compromise between the parties. Of the remaining eight cases, SLP (C) No.13625 of 2010 and SLP (C) No.11945 of 2010 are unrelated and have been wrongly put in this batch. These two SLPs are filed against a common judgment passed by a single judge of the Delhi High Court insofar as though allowing the petitioners' application for enforcement of two foreign awards, the High Court declined to pass any order for payment of interest on the awarded amounts payable to the petitioners. These two cases are, therefore, directed to be de-tagged and listed separately. This leaves behind six cases.
At the conclusion of hearing, one of the cases, being SLP (C) No.31067 of 2009 was directed, on the prayer made by the counsel for the petitioner, to be de-linked from the batch and to be listed separately. It, however, appears that the direction was wrongly obtained since that case and another case in the batch, SLP (C) No.31068 of 2009 arise from a common order and SLP (C) No.31067 of 2009 would also be fully governed by this judgment. Be that as it may, the direction for de-linking is already made and, hence, that case will be separately listed and dealt with in due course. Of the remaining five cases four come from the Delhi High Court and one from the Calcutta High Court.
In SLP (C) No.4648 of 2010 and SLP (C) No.31068 of 2010, the applications filed by the respective respondents in these cases, for enforcement of the foreign award in their favour were allowed by orders passed by a single judge of the High Court. Against the orders of the single judge, the petitioners in these SLPs filed appeals before the division bench of the High Court. All the appeals were taken together and dismissed by a common order as not maintainable.
The petitioners have come before this Court against the order passed by the division bench only, on the question of maintainability of their appeals. Civil Appeal No.36 of 2010 coming from the Calcutta High Court is opposite of the aforementioned two SLPs coming from the Delhi High Court. In this case, against an order passed by a single judge of the High Court, by which he granted relief for enforcement of a foreign award, an appeal was preferred before the division bench of the High Court. The appeal was admitted but a preliminary objection was raised in regard to its maintainability in view of section 50 of the 1996 Act. The division bench by order dated May 8, 2007 rejected the preliminary objection holding that the appeal was maintainable.
6. In SLP (C) Nos.22318-22321 of 2010 a single judge of the Delhi High Court dismissed the suit filed by the petitioner and allowed the application filed by defendant nos.3-5 referring the parties to arbitration in terms of section 45 of the 1996 Act. The petitioner's appeal before the division bench was dismissed as not maintainable. The SLP (C) Nos. 22318-22321 of 2010 are filed under Article 136 of the Constitution challenging orders passed by both the division bench and the single judge of the High Court.
7. The petitioner in SLP (C) Nos.13626-13629 of 2010 is the respondent in SLP (C) No.13625 of 2010 and SLP (C) No.11945 of 2010 which have been held to be unrelated to the batch. Against the order passed by a single judge of the High Court for enforcement of two foreign awards against it, the petitioner in SLP (C) Nos.13626-13629 of 2010, first preferred an appeal before the division bench of the High Court, but the appeal was dismissed by the division bench as not maintainable. The present SLPs are filed challenging both the orders passed by the single judge and the division bench.
8. At the outset Mr. C.A. Sundaram, submitted that the proper course would be to refer the matter to a larger bench of three judges. He pointed out that in Orma Impex Pvt. Ltd. v. Nissai ASB PTE Ltd., (1999) 2 SCC 541, the same question was earlier referred to a bench of three judges of this Court. The Court, however, did not have the occasion to decide the case because it was withdrawn following a settlement between the parties. Mr. Sundaram submitted that though the case does not survive, the issue arising in it (which is the same as in this batch of cases) continues to be alive and hence, following the referral in Orma Impex Pvt. Ltd. (which was in the form of `Record of Proceedings' and not an order of the Court!), all these cases should be referred for hearing before a bench of three judges of this Court. Mr. Dushyant Dave, learned senior advocate appearing for the respondents, in some of the cases in the batch, strongly opposed Mr. Sundaram's submission and contended that there was no need to refer the cases to any larger bench.
9. In Orma Impex Pvt. Ltd., the Delhi High Court had taken the view that against the order passed by a single judge of the High Court under section 45, refusing to refer parties to arbitration, no further appeal would lie under section 50 of the 1996 Act. In the special leave petition filed against the order of the High Court, a bench of two judges of this Court observed that the High Court had failed to notice section 10 of the Delhi High Court Act, 1996 and clause 10 of the Letters Patent which applies to the Delhi High Court.
It further observed that though the view taken by the High Court was supported by a two judge bench decision of this Court in State of West Bengal v. M/s Gourangalal Chatterjee, (1993) 3 SCC 1, which in turn had relied upon an earlier decision of the Court in Union of India v. Mohindra Supply Co., 1962 (3) SCR 497, a contra view was taken by the Court in Vinita M. Khanolkar v. Pragna M. Pai & Ors., (1998) 1 SCC 500. There, thus, appeared a conflict of decisions on the question. In support of the contra view, the division bench also referred to an earlier decision by a three judge bench of this Court in National Sewing Thread Co. Ltd. v. James Chadwick and Bros. Ltd., AIR 1953 SC 357.
10. Mr. Dave pointed out that neither the decision in Vinita M. Khanolkar nor the decision in National Sewing Thread Co. Ltd. was rendered under the provisions of the Arbitration Act; the former was in the context of section 6(3) of the Specific Relief Act, 1963 and the latter under the Trade Marks Act, 1940. He further submitted that after the decisions in Vinita M. Khanolkar and the referral of Orma Impex Pvt. Ltd., a three judge bench of this Court in Union of India & Ors. v. Aradhana Trading Co., (2002) 4 SCC 447, had the occasion to consider the same question, as arising in this batch of cases, though not under the 1996 Act but under the provisions of the Arbitration Act, 1940 (hereinafter "1940 Act"). In Aradhana Trading Co. the Court referred to both the decisions in Vinita M. Khanolkar and in National Sewing Thread Co. Ltd.; the first it did not follow and the second it distinguished as having been rendered on a different set of provisions. Mr. Dave submitted that, thus, the very foundation on which the referral of Orma Impex Pvt. Ltd. was based, no longer held good.
11. On hearing the two sides, we are of the view that in the afore-noted facts and circumstances the referral of Orma Impex Pvt. Ltd. cannot be said to constitute a binding precedent, especially as the case that was referred no 10longer survives. In any event we have heard the two sides at great length and we see no good reason why this matter should be referred to a larger bench and not decided by this Court. We, accordingly, proceed to do so.
12. The question regarding the availability of an appeal under the relevant clause of the Letters Patent has engaged the attention of this Court from time to time under different circumstances and in cases arising under different Acts. We take note of some of the cases here that were brought to our notice by the two sides.
13. In National Sewing Thread Co. Ltd., this Court held that the judgment of a learned single judge of the Bombay High Court, on an appeal preferred under section 76 of the Trade Marks Act was subject to appeal under clause 15 of the Letters Patent of that High Court. The Court noted the material part of clause 15 of the Letters Patent of the High Court and section 76 (1) of the Trade Marks Act and observed:
"The Trade Marks Act does not provide or lay down any procedure for the future conduct or career of that appeal in the High Court, indeed S.77 of the Act provides that the High Court can if it likes make rules in the matter. Obviously after the appeal had reached the High Court it has to be determined according to the rules of practice and procedure of that Court and in accordance with the provisions of the charter under which that Court is constituted and which confers on it power in respect to the method and manner of exercising that jurisdiction. The rule is well settled that when a statute directs that an appeal shall lie to a Court already established, then that appeal must be regulated by the practice and procedure of that Court." (emphasis supplied)
14. Taking support for its view from the decisions in (i) National Telephone Co. Ltd. v. Postmaster-General, (1913) AC 546, (ii) Adaikappa Chettiar v. Chandresekhara Thevar, AIR 1948 PC 12 and (iii) Secy. of State for India v. Chellikani Rama Rao, AIR 1916 PC 21, the decision in National Sewing Thread Co. Ltd. further observed: "Section 76, Trade Marks Act confers a right of appeal to the High Court and says nothing more about it. That being so, the High Court being seized as much of the appellate jurisdiction conferred by S.76 it has to exercise that jurisdiction in the same manner as it exercises its other appellate jurisdiction and when such jurisdiction is exercised by a single Judge, his judgment becomes subject to appeal under Cl.15 of the Letters Patent there being nothing to the contrary in the Trade Marks Act."
15. The Court held that there was nothing in the provisions of section 77 of the Trade Marks Act that would debar the High Court from hearing appeals under section 76, according to the Rules under which all other appeals are heard or from framing Rules for the exercise of that jurisdiction under section 108, Government of India Act, 1915, for hearing those appeals by single judges or by division benches. It also negated the submission that the judgment of the learned single judge would not be subject to an appeal under clause 15 of the Letters Patent because it was not delivered pursuant to section 108, Government of India Act.
16. In Vinita M. Khanolkar, a bench of two judges of this Court held that notwithstanding the bar of sub-section (3), an order passed by a learned single judge of the High Court under section 6 of the Specific Relief Act would nevertheless be subject to appeal under clause 15 of the Letters Patent of the Bombay High Court. In Vinita M. Khanolkar, this Court put the power of the High Court under the Letters Patent at the level of constitutional power of the High Court and went on to observe as follows: "3. Now it is well settled that any statutory provision barring an appeal or revision cannot cut across the constitutional power of a High Court.
Even the power flowing from the paramount charter under which the High Court functions would not get excluded unless the statutory enactment concerned expressly excludes appeals under letters patent. No such bar is discernible from Section 6(3) of the Act. It could not be seriously contended by learned counsel for the respondents that if clause 15 of the Letters Patent is invoked then the order would be appealable. Consequently, in our view, on the clear language of clause 15 of the Letters Patent which is applicable to Bombay High Court, the said appeal was maintainable as the order under appeal was passed by learned Single Judge of the High Court exercising original jurisdiction of the court. Only on that short ground the appeal is required to be allowed."
17. As noted above, Vinita M. Khanolkar, was considered in a later three judge bench decision in Aradhana Trading Co. One may not go so far as to say that Aradhana Trading Co. disapproved Vinita M. Khanolkar wholly but it surely took the opposite view on the question in the context of section 39 of the Arbitration Act, 1940.
18. In Sharda Devi v. State of Bihar, (2002) 3 SCC 705, a bench of three judges of this Court examined the question whether a Letters Patent Appeal is maintainable against the judgment and decree of a single judge of the High Court passed in an appeal preferred under section 54 of the Land Acquisition Act, 1894. A bench of two judges before which the case was earlier put up noticed a conflict of decision on the question. In Baljit Singh v. State of Haryana, bench of two judges of the Court had held that no Letters Patent Appeal is maintainable against the judgment of a single judge of the High Court on an appeal under section 54 of the Land Acquisition Act, whereas in Basant Kumar v. Union of India, (1996) 11 SCC 542, a bench of three judges, without adverting to the decision in Baljit Singh, held that such an appeal is maintainable.
The two judge bench, accordingly, referred the case for hearing before a bench of three judges. The three judge bench affirmed the decision in Basant Kumar. It noted that the decision in Baljit Singh was based on concession made in light of an earlier decision of this Court in South Asia Industries (P) Ltd. v. S.B. Sarup Singh, (1965) 2 SCR 756. The decision in South Asia Industries was in a case under the Delhi Rent Control Act, 1958. In Sharda Devi, the Court pointed out that in South Asia Industries, the Court had examined sections 39 and 43 of the Delhi Rent Control Act and held that a combined reading of the two sections showed that an order passed by the High Court in an appeal under section 39 was to be final.
It was held that the provision of finality was intended to exclude any further appeal. This decision was, thus, based on interpretation of sections 39 and 43 of the Delhi Rent Control Act. Section 54 of the Land Acquisition Act, has no similarity with sections 39 and 43 of the Delhi Rent Control Act. Hence, the decision in South Asia Industries had no relevance to decide the question whether a letters patent appeal is maintainable against the judgment passed by a single judge under section 54 of the Land Acquisition Act. In regard to the Letters Patent jurisdiction of the High Court, this Court in Sharda Devi made the following observation in paragraph 9: "
A Letters Patent is the charter under which the High Court is established. The powers given to a High Court under the Letters Patent are akin to the constitutional powers of a High Court. Thus when a Letters Patent grants to the High Court a power of appeal, against a judgment of a Single Judge, the right to entertain the appeal would not get excluded unless the statutory enactment concerned excludes an appeal under the Letters Patent."
19. Referring to section 54 of the Land Acquisition Act, the Court concluded as follows: 15 "14. ... Section 26 of the said Act provides that every award shall be a decree and the statement of grounds of every award shall be a judgment. By virtue of the Letters Patent "an appeal" against the judgment of a Single Judge of the High Court would lie to a Division Bench. Section 54 of the said Act does not exclude an appeal under the Letters Patent. The word "only" occurring immediately after the non obstante clause in Section 54 refers to the forum of appeal. In other words, it provides that the appeal will be to the High Court and not to any other court e.g. the District Court. The term "an appeal" does not restrict it to only one appeal in the High Court.
The term "an appeal" would take within its sweep even a letters patent appeal. The decision of the Division Bench rendered in a letters patent appeal will then be subject to appeal to the Supreme Court. Read in any other manner there would be a conflict between Section 54 and the provision of a Letters Patent. It is settled law that if there is a conflict, attempt should be made to harmoniously construe the provisions."
20. In Subal Paul v. Malina Paul & Anr., (2003) 10 SCC 361, a bench of three judges of this Court examined the question whether a letters patent appeal would lie against the judgment of a single judge of a High Court on an appeal filed under section 299 of the Indian Succession Act, 1925. Arguing against the maintainability of a letters patent appeal against the judgment of the single judge it was contended that the rejection of the application for probate by the district judge did not give rise to any decree. Hence, an appeal against such an order would be one under section 104 of the Civil Procedure Code and a further appeal would, therefore, be barred under sub-section (2) of section 104.
This Court did not accept the 16submission. It held that the appeal against an order of the district judge would be under section 299 of the Indian Succession Act. Section 104 of the Code simply recognizes appeals provided under special statutes; it does not create a right of appeal as such. Consequently, it does not bar any further appeal also. As regards the nature of an appeal under the Letters Patent, the decision in Subal Paul in paragraphs 21 and 22, observed as follows: "
21. If a right of appeal is provided for under the Act, the limitation thereof must also be provided therein. A right of appeal which is provided under the Letters Patent cannot be said to be restricted. Limitation of a right of appeal, in the absence of any provision in a statute cannot be readily inferred. It is now well-settled that the appellate jurisdiction of a superior court is not taken as excluded simply because the subordinate court exercises its special jurisdiction. In G.P. Singh's Principles of Statutory Interpretation, it is stated:
"The appellate and revisional jurisdiction of superior courts is not taken as excluded simply because the subordinate court exercises a special jurisdiction. The reason is that when a special Act on matters governed by that Act confers a jurisdiction to an established court, as distinguished from a persona designata, without any words of limitation, then, the ordinary incident of procedure of that court including any general right of appeal or revision against its decision is attracted."
22. But an exception to the aforementioned rule is on matters where the special Act sets out a self-contained code, the applicability of the general law procedure would be impliedly excluded. [See Upadhyaya Hargovind Devshanker v. Dhirendrasinh Virbhadrasinhji Solanki (1988) 2 SCC 1]" (emphasis supplied) 1721. In paragraph 32 of the judgment, this Court further observed as follows: "32. While determining the question as regards clause 15 of the Letters Patent, the court is required to see as to whether the order sought to be appealed against is a judgment within the meaning thereof or not. Once it is held that irrespective of the nature of the order, meaning thereby whether interlocutory or final, a judgment has been rendered, clause 15 of the Letters Patent would be attracted."
In P.S. Sathappan v. Andhra Bank Ltd. & Ors., (2004) 11 SCC 672, a constitution bench of this Court once again extensively considered the nature of the Letters Patent jurisdiction of the High Court, and the circumstances in which it would be available and those under which it would be ousted. The question that was referred to the Constitution Bench was: what would be "the effect of the provisions of section 104(2) of the Code of Civil Procedure , 1908 (hereinafter "CPC") vis-`-vis clause 15 of the Letters Patent (of the Madras High Court)"? An application for setting aside the court auction-sale was dismissed by the execution court. An appeal against the order came to the High Court and it was dismissed by a single judge. Against the order of the single judge, a letters patent appeal was filed.
The question of maintainability of the appeal was examined by a full bench of the High Court and the intra-court appeal to the division bench was held to be not maintainable in view of the provisions of section 104(2) of CPC. A 18Constitution Bench of this Court, however, reversed the decision of the full bench of the High Court and by a majority of 3:2 held that the letters patent appeal was perfectly maintainable.
23. P.S. Sathappan is actually an authority on the interplay of section 104 of the Code of Civil Procedure and the Letters Patent jurisdiction of the High Court. The majority judgment went into the history of the matter and pointed out that under the Civil Procedure Codes of 1877 and 1882 there was a divergence of opinion among the different High Courts on the point whether the finality attached to orders passed under section 588 (corresponding to section 104 of the present Code) precluded any further appeals, including a letters patent appeal. The question, then, came up before the Privy Council in the case of Hurrish Chunder Chowdry v. Kali Sundari Debia, ILR (1882) 9 Cal. 482 ( PC). But the decision of the Privy Council, rather than settling the issue gave rise to further conflicting decisions by different High Courts in the country.
The Bombay, Calcutta and Madras High Courts held that section 588 did not take away the right of appeal given under the Letters Patent. On the other hand, the Allahabad High Court took a different view and held that a letters patent appeal was barred under section 588 of the Code. In view of this conflict of views, the legislature stepped in and amended the law. It introduced section 4 and section 104 in the Code. 19Having, thus, put the controversy in the historical perspective, the Court referred to sections 4 and 104 of the Code and made the following observation in paragraph 6 of the judgment: "To be immediately noted that now the legislature provides that the provision of this Code will not affect or limit special law unless specifically excluded. The legislature also simultaneously saves, in section 104(1), appeals under "any law for the time being in force". These would include letters patent appeals." (emphasis supplied )
24. The above is really the kernel of the decision in P.S. Sathappan and the rest of the judgment is only an elucidation of this point.
25. In P. S. Sathappan the constitution bench considered in some detail the 1962 decision by a bench of four judges of the Court in Mohindra Supply Co. (supra) in which the legislative history of section 104 of the Code was traced out in detail and it was shown that by virtue of the saving clause in section 4 and the express language of section 104 that saved an appeal as provided by any other law for the time being in force, a letters patent appeal was not hit by the bar of sub-section (2) of section 104 of the Code. [Mohindra Supply Co., however, was a case under section 39 of the 1940 Act, which did not contain any provision similar to section 4 of the Code and hence, in that case the Court held that the finality attached by sub- 20section (2) to an order passed under sub-section (1) of section 39 barred any further appeal, including a letters patent appeal.]
26. In P.S. Sathappan, on a consideration of a number of earlier decisions, the Constitution Bench concluded that till 1996, the unanimous view of all courts was that section 104(1) CPC specifically saved letters patent appeals and the bar under section 104(2) did not apply to letters patent appeals. Thereafter, there were two decisions in deviation from the accepted judicial view, one by a bench of two judges of this Court in Resham Singh Pyara Singh v. Abdul Sattar, (1996) 1 SCC 49 and the other by a bench of three judges of this Court in New Kenilworth Hotel (P) Ltd. v. Orissa State Finance Corpn., (1997) 3 SCC 462. P.S. Sathappan, overruled both these decisions and declared that Resham Singh Pyara Singh and New Kenilworth Hotel (P) Ltd. laid down wrong law.
It further pointed out that even after the aforementioned two decisions this Court had continued to hold that a Letters Patent Appeal is not affected by the bar of section 104(2) CPC. In this connection, it referred to Vinita M. Khanolkar (supra), under section 6 of the Specific Relief Act, Chandra Kanta Sinha v. Oriental Insurance Co. Ltd. & Ors., (2001) 6 SCC 158, under section 140 of the Motor Vehicles Act, 1988, Sharda Devi (supra), under section 54 of the Land Acquisition Act and Subal Paul (supra), under section 299 of the Indian Succession Act, 211925 and came to the conclusion that the consensus of judicial opinion has been that section 104(1) CPC expressly saves the letters patent appeal and the bar under section 104(2) CPC does not apply to letters patent appeals. In paragraph 22 of the judgment, the Court observed as follows:
The view has been that a letters patent appeal cannot be ousted by implication but the right of an appeal under the Letters Patent can be taken away by an express provision in an appropriate legislation. The express provision need not refer to or use the word "letters patent" but if on a reading of the provision it is clear that all further appeals are barred then even a letters patent appeal would be barred."
27. Further, analysing the two sub-sections of section 104(2) along with section 4 CPC, this Court in paragraph 30 of the judgment observed as follows: "30.... Section 104 must be read as a whole and harmoniously. If the intention was to exclude what is specifically saved in sub- section (1), then there had to be a specific exclusion. A general exclusion of this nature would not be sufficient. We are not saying that a general exclusion would never oust a letters patent appeal. However, when section 104(1) specifically saves a letters patent appeal then the only way such an appeal could be excluded is by express mention in section 104(2) that a letters patent appeal is also prohibited. . ...."
28. Mr. Sundaram heavily relied upon this decision.
29. 29. The decisions noticed so far lay down certain broad principles that may be stated as follows: 221. Normally, once an appeal reaches the High Court it has to be determined according to the rules of practice and procedure of the High Court and in accordance with the provisions of the charter under which the High Court is constituted and which confers on it power in respect to the method and manner of exercising that power.2. When a statute merely directs that an appeal shall lie to a court already established then that appeal must be regulated by the practice and procedure of that court.3. The High Court derives its intra-court appeal jurisdiction under the charter by which it was established and its powers under the Letters Patent were recognized and saved by section 108 of the Government of India Act, 1915, section 223 of the Government of India Act, 1935 and finally, by Article 225 of the Constitution of India.
The High Court, therefore, cannot be divested of its Letters Patent jurisdiction unless provided for expressly or by necessary intendment by some special statute.4. If the pronouncement of the single judge qualifies as a "judgment", in the absence of any bar created by a statute 23 either expressly or by necessary implication, it would be subject to appeal under the relevant clause of the Letters Patent of the High Court.5. Since section 104(1) CPC specifically saves the letters patent appeal it could only be excluded by an express mention in section 104(2). In the absence of any express mention in section 104(2), the maintainability of a letters patent appeal is saved by virtue of section 104(1). 6. Limitation of a right of appeal in absence of any provision in a statute cannot be readily inferred.
The appellate jurisdiction of a superior court cannot be taken as excluded simply because a subordinate court exercises its special jurisdiction.7. The exception to the aforementioned rule is where the special Act sets out a self-contained code and in that event the applicability of the general law procedure would be impliedly excluded. The express provision need not refer to or use the word "letters patent" but if on a reading of the provision it is clear that all further appeals are barred then even a letters patent appeal would be barred.
30. These general principles are culled out from the decisions of this Court rendered under section 104 of the CPC and various other Acts, as noted above. But there is another set of decisions of this Court on the question under consideration rendered in the context of section 39 of the 1940 Act. Section 39 of the erstwhile Act contained the provision of appeal and provided as follows: "39. Appealable orders.—
A. An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order: An order -
i. superseding an arbitration;
ii. on an award stated in the form of a special case;
iii. modifying or correcting an award;
iv. filing or refusing to file an arbitration agreement;
v. staying or refusing to stay legal proceedings where there is an arbitration agreement;
vi. setting aside or refusing to set aside an award: PROVIDED THAT the provisions of this section shall not apply to any order passed by a Small Cause Court.
B. No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court." 25[Insofar as relevant for the present, section 37 of the 1996 Act, is very similar to section 39 of the previous Act as quoted above.]
31. In Mohindra Supply Co., a bench of four judges of this Court held that a letters patent appeal against an order passed by a single judge of the High Court on an appeal under section 39(1) of the 1940 Act was barred in terms of sub-section (2) of section 39. This decision is based on the bar against further appeals as contained in sub-section (2) of section 39 of the 1940 Act and, therefore, it may not have a direct bearing on the question presently under consideration.
32. More to the point are two later decisions. In M/s Gourangalal Chatterjee, a bench of two judges of this Court held that an order, against which no appeal would lie under section 39(1) of the 1940 Act, could not be taken in appeal before the division bench of the High Court under its Letters Patent. The same view was reaffirmed by a bench of three judges of this Court in Aradhana Trading Co.
33. In regard to these two decisions, Mr. Sundaram took the position that both M/s Gourangalal Chatterjee and Aradhana Trading Co. were rendered on section 39 of the 1940 Act, the equivalent of which is section 37 of the 1996 Act. In view of the two decisions, he conceded that in the event an order was not appealable under section 37(1) of the 1996 Act, it would not 26be subject to appeal under the Letters Patent of the High Court. He, however, referred to section 50 of the 1996 Act, which is as follows: "50. Appealable orders. (1) An appeal shall lie from the order refusing to (a) refer the parties to arbitration under section 45; (b) enforce a foreign award under section 48, to the court authorised by law to hear appeals from such order. (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."
34. Mr. Sundaram submitted that section 50, unlike section 39 of the previous Act and section 37 of the current Act does not have the words "(and from no others)" and that, according to him, made all the difference. He contended that the omission of the words in parenthesis was significant and it clearly pointed out that unlike section 37, even though an order was not appealable under section 50, it would be subject to appeal under the Letters Patent of the High Court. At any event the decisions rendered under section 39 of the 1940 would have no application in a case relating to section 50 of the 1996 Act.
35. Mr. Dave, in reply submitted that the words "(and from no other)" occurring in section 39 of the 1940 Act and section 37 of the 1996 Act were actually superfluous and seen, thus, there would be no material difference between the provisions of section 39 of the 1940 Act or section 37 of the 1996 Act and section 50 of the 1996 Act and all the decisions rendered on section 39 of the 1940 Act will apply with full force to cases arising under section 50 of the 1996 Act.
36. The use of round brackets for putting words in parenthesis is not very common in legislation and this reminds us of the painful lament by Meredith, J. of the Patna High Court, who in 1948 dealing with a case said that "the 1940 Act contains examples of bad drafting which it would be hard to beat".
37. According to the New Oxford Dictionary of English, 1998 edition, brackets are used to enclose words or figures so as to separate them from the context. The Oxford Advanced Learner's Dictionary, Seventh edition defines "bracket" to mean "either of a pair of marks, ( ) placed around extra information in a piece of writing or part of a problem in mathematics". The New Oxford Dictionary of English, 1998 edition gives the meaning and use of parenthesis as: "Parenthesis-noun (pl. parentheses) a word, clause, or sentence inserted as an explanation or afterthought into a passage which is grammatically complete without it, in writing usually marked off by brackets, dashes, or commas. - (usu. Parentheses) a pair of round brackets ( ) used to include such a word, clause, or sentence."
38. The Oxford Advanced Learner's Dictionary, Seventh edition, defines the meaning of parenthesis as: "a word, sentence, etc. that is added to a speech or piece of writing, especially in order to give extra information. In writing, it is separated from rest of the text using brackets, commas or DASHES."
39. The Complete Plain Words by Sir Ernest Gowers, 1986 revised edition by Sidney Greenbaum and Janet Whitcut, gives the purpose of parenthesis as follows: "Parenthesis The purpose of a parenthesis is ordinarily to insert an illustration, explanation, definition, or additional piece of information of any sort into a sentence that is logically and grammatically complete without it. A parenthesis may be marked off by commas, dashes or brackets. The degree of interruption of the main sentence may vary from the almost imperceptible one of explanatory words in apposition, to the violent one of a separate sentence complete in itself."
40. The Merriam Webster Online Dictionary defines parenthesis as follows: "1 a : an amplifying or explanatory word, phrase, or sentence inserted in a passage from which it is usually set off by punctuation b : a remark or passage that departs from the theme of a discourse : digression 2: interlude, interval 3: one or both of the curved marks ( ) used in writing and printing to enclose a parenthetical expression or to group a symbolic unit in a logical or mathematical expression"
41. The Law Lexicon, The Encyclopaedic Law Dictionary by P. Ramanatha Aiyar, 2000 edition, defines parenthesis as under: "Parenthesis. a parenthesis is defined to be an explanatory or qualifying clause, sentence, or paragraph, inserted in another sentence, or in course of a longer passage, without being grammatically connected with it. (Cent. Dist.) PARENTHESIS is used to limit, qualify or restrict the meaning of the sentence with which it is connected, and it may be designated by the use of commas, or by a dash, or by curved lines or brackets [53 Fed.81 (83); 3C, CA 440]."
42. Having regard to the grammatical use of brackets or parentheses, if the words, "(and from no others)" occurring in section 39 of the 1940 Act or section 37 of the 1996 Act are viewed as `an explanation or afterthought' or extra information separate from the main context, then, there may be some substance in Mr. Dave's submission that the words in parentheses are surplusage and in essence the provisions of section 39 of the 1940 Act or section 37 of the 1996 Act are the same as section 50 of the 1996 Act. Section 39 of the 1940 Act says no more and no less than what is stipulated in section 50 of the 1996 Act.
43. But there may be a different reason to contend that section 39 of the 1940 Act or its equivalent section 37 of the 1996 Act are fundamentally different from section 50 of the 1996 Act and hence, the decisions rendered 30under section 39 of the 1940 Act may not have any application to the facts arising under section 50 of the 1996 Act.
44. But for that we need to take a look at the basic scheme of the 1996 Act and its relevant provisions. Before the coming into force of the Arbitration and Conciliation Act, 1996 with effect from August 16, 1996, the law relating to domestic arbitration was contained in the Arbitration Act, 1940, which in turn was brought in place of the Arbitration Act, 1899. Apart from the Arbitration Act 1940, there were two other enactments of the same genre. One called the Arbitration (Protocol and Convention) Act, 1937 (for execution of the Geneva Convention Awards) and the other called the Foreign Awards (Recognition and Enforcement) Act, 1961 (for enforcement of the New York Convention awards).
45. The aforesaid three Acts were replaced by the Arbitration and Conciliation Act, 1996, which is based on the United Nations Commission on International Trade Law (UNCITRAL) Model and is broadly compatible with the "Rules of Arbitration of the International Chamber of Commerce". The Arbitration and Conciliation Act, 1996 that has repealed the Arbitration Act, 1940 and also the Acts of 1937 and 1961, consolidates and amends the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and defines the law relating to conciliation and provides for matters connected therewith and incidental thereto taking into account the UNCITRAL MODEL law and Rules.
46. The Statement of Objects and Reasons of the Arbitration and Conciliation Act, 1996 reads as under: "Statement of Objects and Reasons The law of arbitration in India is at present substantially contained in three enactments, namely, The Arbitration Act, 1940, The Arbitration (Protocol and Convention) Act, 1937 and The Foreign Awards (Recognition and Enforcement) Act, 1961. It is widely felt that the 1940 Act, which contains the general law of arbitration, has become outdated. The Law Commission of India, several representative bodies of trade and industry and experts in the field of arbitration have proposed amendments to this Act to make it more responsive to contemporary requirements.
It is also recognised that our economic reforms may not become fully effective if the law dealing with settlement of both domestic and international commercial disputes remains out of tune with such reforms. Like arbitration, conciliation is also getting increasing worldwide recognition as an instrument for settlement of disputes. There is, however, no general law on the subject in India. 2. The United Nations Commission on International Trade Law (UNCITRAL) adopted in 1985 the Model Law on International Commercial Arbitration. The General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice. The UNCITRAL also adopted in 1980 a set of Conciliation Rules.
The General Assembly of the United Nations has recommended the use of these Rules in cases where the disputes arise in the context of international commercial relations and the parties seek amicable settlement of their disputes by recourse to conciliation. An important feature of the said UNCITRAL Model Law and Rules is that they have harmonised concepts on arbitration and conciliation of different legal systems of the world and thus contain provisions which are designed for universal application.3. Though the UNCITRAL Model Law and Rules are intended to deal with international commercial arbitration and conciliation, they could, with appropriate modifications, serve as a model for legislation on domestic arbitration and conciliation.
The present Bill seeks to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, taking into account the said UNCITRAL Model Law and Rules.4. The main objectives of the Bill are as under:-
i. to comprehensively cover international and commercial arbitration and conciliation as also domestic arbitration and conciliation;
ii. to make provision for an arbitral procedure which is fair, efficient and capable of meeting the needs of the specific arbitration;
iii. to provide that the arbitral tribunal gives reasons for its arbitral award;
iv. to ensure that the arbitral tribunal remains within the limits of its jurisdiction;
v. to minimise the supervisory role of courts in the arbitral process;
vi. to permit an arbitral tribunal to use mediation, conciliation or other procedures during the arbitral proceedings to encourage settlement of disputes;
vii. to provide that every final arbitral award is enforced in the same manner as if it were a decree of the court;
viii. to provide that a settlement agreement reached by the parties as a result of conciliation proceedings will have the same status and effect as an arbitral award on agreed terms on the substance of the dispute rendered by an arbitral tribunal; and
ix. to provide that, for purposes of enforcement of foreign awards, every arbitral award made in a country to which 33 one of the two international Conventions relating to foreign arbitral awards to which India is a party applies, will be treated as a foreign award. 5. The Bill seeks to achieve the above objects." (emphasis supplied)
47. The Preamble of the Arbitration and Conciliation Act, 1996 is as follows: "PREAMBLE WHEREAS the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on International Commercial Arbitration in 1985; AND WHEREAS the General Assembly of the United Nations has recommended that all countries give due consideration to the said Model Law, in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice; AND WHEREAS the UNCITRAL has adopted the UNCITRAL Conciliation Rules in 1980;
AND WHEREAS the General Assembly of the United Nations has recommended the use of the said Rules in cases where a dispute arises in the context of international commercial relations and the parties seek an amicable settlement of that dispute by recourse to conciliation; AND WHEREAS the said Model Law and Rules make significant contribution to the establishment of a unified legal framework for the fair and efficient settlement of disputes arising in international commercial relations; AND WHEREAS it is expedient to make law respecting arbitration and conciliation, taking into account the aforesaid Model Law and Rules;"
48. The new Act is a loosely integrated version of the Arbitration Act, 1940, Arbitration (Protocol and Convention) Act, 1937 and Foreign Awards (Recognition and Enforcement) Act, 1961. It actually consolidates amends and puts together three different enactments. But having regard to the difference in the object and purpose and the nature of these three enactments, the provisions relating thereto are kept separately. A mere glance at the 1996 Act is sufficient to show that under its scheme the provisions relating to the three enactments are kept separately from each other. The 1996 Act is divided into four parts and it has three schedules at its end. Part I has ten chapters that contain provisions governing domestic arbitration and international commercial arbitration. Part II has two chapters; Chapter I contains provisions relating to the New York Convention
Awards and Chapter II contains provisions relating to the Geneva Convention Awards. Part III of the Act has provisions concerning conciliation. Part IV has the supplementary provisions such as the power of the High Court to make rules (section 82), provision for removal of difficulties (section 83), and the power to make rules (section 84). At the end there are two repeal and saving sections. Section 85 repeals the three enactments referred to above, 35subject to the appropriate saving clause and section 86 repeals Ordinance 27 of 1996, the precursor of the Act, subject to the appropriate saving clause. Of the three schedules, the first is related to Part II, Chapter I, i.e., the New York Convention Awards and the second and the third to Chapter II, i.e., the Geneva Convention Awards.
49. There is a certain similarity between the provisions of Chapters I and II of Part II but Part I of the Act is vastly different from Chapters I and II of Part II of the Act. This is quite understandable too since Part II deals only with enforcement of foreign awards (Chapter I, of New York Convention Awards and Chapter II, of Geneva Convention Awards) while Part I of the Act deals with the whole gamut of law concerning domestic arbitration and international commercial arbitration. It has, therefore, a very different and much larger framework than the two chapters in Part II of the Act.
50. Part I has ten chapters. Chapter I begins with definition clauses in section 2 that defines, amongst other terms and expressions, "arbitration", "arbitration agreement", "arbitral award", etc. Chapter I also contains some "General Provisions" (sections 3-6). Chapter II contains provisions relating to "Arbitration Agreement" (sections 7-9). Chapter III contains provisions relating to "Composition of Arbitral Tribunal" (sections 10-15). Chapter IV deals with the "Jurisdiction of Arbitral Tribunals" (sections 16-17). Chapter V lays down provisions concerning "Conduct of Arbitral Proceedings" (sections 18-27). Chapter VI deals with "Making of Arbitral Award and Termination of Proceedings" (sections 28-33). Chapter VII has only one section, i.e., section that provides "Recourse against Arbitral Award". Chapter VIII deals with "Finality and Enforcement of Arbitral Awards" (sections 35-36). Chapter IX provides for "Appeals" (section 37 which is akin to section 39 of the 1940 Act). Chapter X contains the "Miscellaneous" provisions (sections 38-43).
