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1961 (9) TMI 41 - SC - Companies LawA dispute between the appellant and the respondent arising out of a contract for the supply of fuel was referred to arbitration. The arbitrators gave an award directing the appellant to pay a certain sum of money to the respondent and filed the award in the court of the Subordinate judge. The appellant made an application for setting aside the award but it was rejected. Against this order the appellant preferred an appeal to the High Court under s. 39(1) of the Indian Arbitration Act, 1940, and a Single judge allowed the appeal and set aside the award. Thereupon the respondent filed a Letters Patent appeal against the judgment of the Single judge - Held, that an appeal against the appellate order of the single Judge was barred by s. 39(2) of the Arbitration Act. The expression second appeal in s. 39(2) means a further appeal from an order passed in appeal under s. 39(1) and not an appeal under s. 100 of the Civil Procedure Code, and includes an appeal under the Letters Patent.
Issues Involved:
1. Validity of the appeal under Clause 10 of the Letters Patent of the High Court against the order of a Single Judge. 2. Interpretation of Section 39 of the Indian Arbitration Act, 1940. 3. Legislative history and the effect of the Arbitration Act on the right to appeal under the Letters Patent. Detailed Analysis: 1. Validity of the Appeal under Clause 10 of the Letters Patent: The primary issue in this case was whether an appeal under Clause 10 of the Letters Patent of the High Court against the order of a Single Judge was maintainable. The Division Bench of the High Court had set aside the order of Falshaw, J., who had invalidated the arbitration award. The Full Bench of the High Court opined that an appeal from the judgment of a Single Judge exercising appellate powers did lie under Clause 10 of the Letters Patent, notwithstanding the bar contained in Section 39(2) of the Arbitration Act. However, the Supreme Court disagreed, stating that the right to appeal under the Letters Patent is restricted by Section 39 of the Arbitration Act. 2. Interpretation of Section 39 of the Indian Arbitration Act, 1940: Section 39 of the Arbitration Act deals with appeals and provides that an appeal shall lie from certain specified orders and from no others. Sub-section (2) explicitly states that no second appeal shall lie from an order passed in appeal under this section, except an appeal to the Supreme Court. The Supreme Court emphasized that the two sub-sections of Section 39 are part of a single legislative pattern, and the right to appeal is confined to the specified orders. The Court rejected the argument that intra-court appeals (appeals within the same court) are not restricted by Section 39(2). The Court clarified that the term "second appeal" in Section 39(2) includes an appeal under the Letters Patent. 3. Legislative History and the Effect of the Arbitration Act on the Right to Appeal under the Letters Patent: The Supreme Court discussed the legislative history and the judicial interpretations of the right to appeal under the Letters Patent in the context of the Arbitration Act. The Court noted that before the Arbitration Act of 1940, the right to appeal against certain orders was governed by the Code of Civil Procedure. However, the Arbitration Act of 1940, being a consolidating and amending statute, intended to codify the law relating to arbitration and appeals. The Act repealed the Arbitration Act of 1899 and certain provisions of the Code of Civil Procedure, thereby restricting the right to appeal within the strict limits defined by Section 39. The Court referred to the Privy Council's dictum in Hurrish Chunder Chowdry v. Kali Sundari Debia, which held that Section 588 of the Civil Procedure Code, which restricted certain appeals, did not apply to intra-court appeals under the Letters Patent. However, the Supreme Court distinguished this case by emphasizing that the Arbitration Act of 1940 did not include a provision similar to Section 4 of the Code of Civil Procedure, which preserved the right to appeal under special statutes. Therefore, the right to appeal under the Letters Patent must be read subject to the provisions of Section 39 of the Arbitration Act. The Court concluded that the legislature, by codifying the law relating to appeals in Section 39 of the Arbitration Act, intended to restrict the right of appeal within the limits defined by the section and to take away the right conferred by other statutes, including the Letters Patent. The appeal under Clause 10 of the Letters Patent was thus not maintainable. Conclusion: The Supreme Court allowed the appeal, set aside the order of the Division Bench of the High Court, and restored the order passed by the learned Single Judge. The Court did not hear counsel on the merits of the appeal due to the conclusion reached on the competency of the appeal under Clause 10 of the Letters Patent. The appeal was allowed with no order as to costs in the Supreme Court.
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