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TMI Blog2011 (10) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... /2011 JUDGMENT G.S. GODBOLE, J. 1. The fight over ownership of the shares of an airline, whose aircrafts ply at high altitude at sub zero temperatures, has generated a lot of heat and litigation which has led to the filing of these appeals. Both the Appeals are filed for challenging the Judgment and Order dated 4th May, 2011 passed by the Learned Single Judge (Dr. D.Y. Chandrachud, J) in Execution Application No. 161 of 2009 with Chamber Summons Nos. 551/09, 729/09, 603/10 477/11 and Notice No. 734 of 2009 in Arbitration Award dated 12 April 2007. The Appellants in Appeal No. 345 of 2011 (Jet Airways (India) Limited) was the first Claimant, whereas the Appellants in the cross-Appeal No. 456 of 2011 (Mr. Subrata Roy Sahara ors.) were the second Claimants in the proceedings of Arbitration to which a reference would be made in due course. 2. Initially, the second Claimants being the Appellants in Appeal No. 456 of 2011 (Appeal (Lodg.) No. 293 of 2011) had alone filed their Appeal and on 6th May, 2011, we had passed an interim order which reads thus : Stand over to 14th June, 2011. 1. Mr.Janak Dwarkadas, learned senior counsel for the respondent no. 1 states that the respondent no. 1 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its Judgment in the case of Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. in Special Leave Petition (Civil ) No. 11945 of 2010 on 8/7/2011 dealing with a similar issue regarding the maintainability of a Letters Patent Appeal against an Order passed in proceedings under Part-II of the Arbitration and Conciliation Act, 1996 (2011(7) SCALE 513), attention of the Learned Senior Counsel appearing for the respective parties was invited to the said Judgment. Accordingly, thereafter, Learned Sr. Counsel have advanced their respective submissions on the question of maintainability of the Appeals and it is urged by both of them that their respective Appeals are maintainable. In all fairness it must be stated that Mr. Fali Nariman, the Learned Sr. Counsel for the Appellants in Appeal No. 456 of 2011 also invited our attention to the fact that by way of abundant caution and in case the question of maintainability of the Appeal is decided against the Appellants, with a view to ensure that no further complications arise on account of limitation, the said Appellants have lodged a Special Leave Petition in the Hon'ble Supreme Court of India and the question whether the same would be prosecute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all encumbrances, all the rights, title and interest of the vendors in the 'sale shares' being the existing equity and preference shares, representing the entire issued and paid up share capital of Sahara Airlines Limited. (ii) The obligation of the purchaser to acquire the shares was conditional upon the fulfillment of certain conditions mentioned in clause 3. Parties agreed to exercise all reasonable endeavours to ensure satisfaction of the conditions precedent not later than sixty five days from the effective date (18 January 2006) i.e. by 23 March 2006. (iii) The gross total consideration was Rs.2,000/-crores together with interest accrued until the closing date. The total consideration was to be deposited by the purchaser simultaneously with the execution of the SPA with an escrow agent. (c) Since the conditions precedent were not fulfilled within sixty five days of the effective date, time was extended by ninety days by the amended agreement of 29 March 2006; and an amount of Rs.500 crores out of the total consideration of Rs.2,000/-crores deposited by Jet with the escrow agent was released by consent to Sahara against a personal guarantee. (d) According to Jet, the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counter claims were withdrawn; and (ii) An award was passed in terms of the Consent Terms. On 20 April 2007, the Consent Terms were implemented. All shares were transferred and management came from Sahara to Jet. (g) Thereafter, the dispute arose between the vendors and the purchaser on account of a notice of demand dated 23 August 2007 issued under section 156 of the Income Tax Act, 1961 for the assessment year 2004-2005 for a sum of Rs. 444.5 crores. (h) On the backdrop of the above facts, the proceedings were initiated in this court. We have the benefit of the narration in respect of the said proceedings as made by the Learned Single Judge in Part II of the impugned Judgment and instead of repeating the same, we deem it appropriate to briefly summarise the same as under : (i) On 26 March 2009, Execution Application No. 161 of 2009 was filed by Sahara for the execution of the decree in the amount of Rs.999.58 crores on the footing that the original purchase price of the shares stood restored. (ii) Jet filed Chamber Summons No. 551 of 2009 in Execution Application 161 of 2009 on 31 March 2009, seeking a declaration that Sahara has not become entitled to execute the award for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculation involved, both the learned counsel appearing on behalf of Second Claimant Nos.2 to 8 and for Jet have verified the computation of the balance due and payable by Jet to Second Claimant Nos. 2 to 8. Upon hearing the learned counsel the Court has come to the conclusion that interest should be awarded to Second Claimant Nos.2 to 8 at the rate of 9% per annum in the facts and circumstances of the case. The following calculation has been made on that basis. The computation of the amount due and payable by the Jet to Second Claimant Nos.2 to 8 is as follows : Calculation of Simple Interest on the basis of Rs.1450 Crores - Period from 31.03.2008 to 30.04.2011 Amount in Rupees S. No. Particulars Opening Balance Due Amount Paid Amount appropriated towards interest Closing Balance Due Interest @9% 1. Upto 31- 03-2008 5,500,000,000 1,004,200,000 - 4,495,800,000 1,108,553 2. Upto 31- 03-2009 4,495,800,000 - - 4,026,530,553 404,622,000 3. Upto 31- 03-2010 4,026,530,553 - - 4,026,530,553 362,387,750 4. Upto 31- 03-2011 4,026,530,553 - - 4,026,530,553 362,387,750 5. Upto 30- 04-2011 (i.e. for I Month) 4,026,530,553 4,026,530,553 29,785,295 Total 1,160,291,348 Total interest 1,160,291,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edure, 1908, and Arbitration Act 1940 (the 1940 Act). A. PROVISIONS OF ARBITRATION AND CONCILIATION ACT, 1996: (a) Section 2(e) defines the word Court as the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction,........... (b) Section 5 of the Act provides for extent of judicial intervention and reads thus : 5. Extent of judicial intervention.-Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. (c) Section 19(1) of the Act deals with the determination of rules of procedure which reads thus : 19. Determination of rules of procedure.-(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 or the Indian Evidence Act, 1872. (d) Section 30 provides for settlement and passing of an arbitral award on agreed terms and section 31 provides for forms and contents of arbitral award. (e) Section 32 provides that the arbitral proceedings shall be terminated by the final arbitral award. Section 33 provides for correction and interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd except the difference that the words ( and from no others ) in sub-section 1 of section 37 are absent in section 50. B. PROVISIONS OF THE LETTERS PATENT HIGH COURT BOMBAY (a) The present appeals have been filed under section 15 of the Letters Patent of the High Court at Bombay and it is therefore necessary to extricate clauses 15 and 44 of the Letters Patent. 15. Appeal to the High Court from Judges of the Court : -And We do further ordain that an appeal shall lie to the said High Court of Judicature at Bombay from the judgment (not being a judgment passed in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court, and not being an order made in the exercise of revisional jurisdiction and not being a sentence or order passed or made in the exercise of the power of superintendence under the provisions of section 107 of the Government of India Act, or in the exercise of criminal jurisdiction) of one Judge of, the said High Court or one Judge of any Divisional Court, pursuant to section 108 of the Government of India Act, and that notwithstanding anything herein before provided an appeal shall lie to the said High Court from a Judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 17 reads thus : 17. Judgment in terms of award. Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award. (b) Chapter 6 provides for appeals and contains only section 39 which reads thus : APPEALS 39. Appealable orders. (1) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be held to be maintainable and heard on merits even if the parties consent. 12. Mr. Fali Nariman, Learned Sr. Advocate has submitted written submissions in the form of 2 separate notes which also deal with the Judgment in the case of Fuerst Day Lawson (supra). Advocates for the Appellants in Appeal No. 345 of 2011 have also filed separate written submissions and have also relied upon the various judgments which would be referred to in due course. Both the learned Counsels essentially sought to distinguish the Judgment of the Supreme Court in the case of Fuerst Day Lawson (supra) by advancing various submissions. 13. Mr. F.S. Nariman, learned senior counsel advanced the following submissions on the question of maintainability of the appeals : Part I-Submissions regarding exclusion of appeals on account of section 37 of the 1996 Act and conflict between 1996 Act and the Letters Patent. a) Relying on the observations in paragraph-52 of the Judgment in the case of Fuerst Day Lawson (supra) it was submitted that this case deals only with enforcement of foreign awards under Part-II of the 1996 Act and not domestic awards which are enforced under section 36 falling in Part-1 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor is there any exclusion by necessary implication of the applicability of clause 15 of the Letters Patent in respect of the proceedings under Part I of the Act. (f) The conclusion drawn by the Supreme Court in paragraph-73 is not broad and all pervasive and will apply only to Part-II of 1996 Act. In any case, the question whether the said conclusions in paragraph-73 apply even to the proceedings in Part-I of the Act or not is an exercise which can be done only by the Supreme Court and not by this court. Part II -Submissions regarding maintainability/non-maintainability of the appeals on account of the amendments made in the Code of Civil Procedure 1908 by amending Act 104 of 1976. (g) The present appeals are not filed under the Code but are filed under clause 15 of the Letters Patent. It is trite law that though the appeal is not maintainable under the Code, it does not become non maintainable under the Letters Patent. The test for maintainability of Letters Patent Appeal that has stood test of time is the decision of the Supreme Court in Shah Babulal Khimji AIR 1981 SC 1786 : 1981 (4) SCC page 8 1981 SC 1786: 1981 (4) SCC 8 which makes every adjudication by a single Judge which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an award but essentially apply to orders passed by the Arbitral Tribunal and proceedings before the Arbitral Tribunal. The ratio of the Judgment in the case of Fuerst Day Lawson (supra) will have to be considered and interpreted on the aforesaid background and the said Judgment and its ratio or any observations made therein have no application whatsoever to the facts of the present case. Relying on the Judgment of STO vs. Oriental Coal Corporation 1988 (Supp) SCC 309 : 1988 (Supp) SCC 309 it was submitted that the Judgment has to be read in the context in which it was decided and is not an authority for a proposition that is based on a concession of counsel. While the power of arbitral tribunal ceases upon termination of the arbitral proceedings under section 32 of the 1996 Act, the role of the Court comes to an end once the process of enforcement of an award under Part I begins and the role of Arbitration Act ceases. (d) A reading of section 37 of the Act would make it apparent that the appellable orders contemplated therein are either passed by the Court under section 9 or 34 or by the Arbitral Tribunal under sections 16 or 17 of the Act and, hence, though the Act is self contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sections 35 and 36 shall be enforced....... as if it were a decree of the Court. (Emphasis supplied) (i) The Supreme Court judgment is clearly distinguishable, as the question of whether an order (other than those specified under Section 37 of the Act) in execution of an award, being an order under Part I of the Act, is appealable, was not before the Hon'ble Supreme Court in this case. Section 37 of the Act deals with appealable orders. Paragraph 52 of the Lawson Case specifically brings out the differences in the objects and purpose and the respective Schemes, as contained in Part I and Part II of the Act. (j) The focus of the enquiry before the Hon'ble Supreme Court was solely in the context of Enforcement of Foreign Awards under Part II of the Act (and no others). (k) The present appeals arise from an order passed by a Single Judge under the provisions of Order 21, Rule 11, of the CPC and the Learned Judge was acting as an executing Court in pursuance of the provisions of the CPC. (l) All the observations made by the Hon'ble Court in paragraphs 52, 53, 72 and 74 were mere passing observations and while certainly not the ratio, cannot even be considered to be obite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1908) in the same manner as if it were a Decree of a court. In fact section 17 of the 1940 Act does not make an arbitration award a decree of the court even though Chapter II of the said Act dealt with the arbitration without intervention of a court. Section 30 of 1940 Act provides for filing a petition for setting aside an award and in that context section 17 provided that when the time for filing a petition under section 30 of that Act had expired or when the petition filed for setting aside the award has been dismissed, the court shall proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall fallow. Thus the 1940 Act clearly provided for a decree being passed by the Court. There is fundamental difference in the provisions of section 36 of the 1996 Act and section 17 of the 1940 Act only in this regard. (b) The words as if it were a decree of the court used in section 36 have already been interpreted by the Supreme Court in Paramjeet Singh Patheja vs. ICDS Ltd. (2006) 13 SCC 322. In that case, an award under 1996 Act was passed on 26/6/2000 and on the strength of the said award an insolvency notice was issued under section 9(2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owns Insolvency Act, 1909 on the basis of an Arbitration Award; ii) That execution proceedings in respect of the award cannot be proceeded with in view of the statutory stay under Section 22 of the SICA Act. As such, no insolvency notice is liable to be issued against the appellant. iii) Insolvency Notice cannot be issued on an Arbitration Award. iv) An arbitration award is neither a decree nor an Order for payment within the meaning of Section 9(2). The expression decree in the Court Fees Act, 1870 is liable to be construed with reference to its definition in the CPC and held that there are essential conditions for a decree . (a) that the adjudication must be given in a suit. (b) That the suit must start with a plaint and culminate in a decree, and (c) That the adjudication must be formal and final and must be given by a civil or revenue court. An award does not satisfy any of the requirements of a decree. It is not rendered in a suit nor is an arbitral proceeding commenced by the institution of a plaint. (v) A legal fiction ought not to be extended beyond its legitimate field. As such, an award rendered under the provisions of the Arbitration Act, 1996 cannot be construed to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Act it was provided that subject to the provisions of 1940 Act the provisions of the Code shall apply to all proceedings before the Court under that Act and to all appeals under that Act. Such a provision is completely absent in the 1996 Act and this is one more indication that the proceedings under 1996 Act even for implementation of award cannot be considered to be proceedings under the Code. Even section 41 of the 1940 Act has been construed by the Supreme Court in the case of Union of India vs. Mohinder Supply Company (supra) and State of West Bengal vs. Gauranglal Chaterji (supra) it is held that the said provision is subject to the limitation contained in section 39 of the 1940 Act. For all the aforesaid reasons, we have no hesitation in holding that nature of proceedings before the learned Single Judge were proceedings under the 1996 Act and not proceedings under the Code. 17. An other way of looking at this aspect is the question as to what would be effect of holding that a Letters Patent Appeal is maintainable in juxtaposition to the scheme of the 1996 Act. Under section 2(e) of the 1996 Act, the term court is defined which we have already extracted hereinabove. Thus, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond Appeal arising out of the orders passed in execution of a decree passed in a suit cognizable by the Court of Small Causes. A preliminary objection was raised on the ground that as a Second Appeal is not maintainable against a decree passed in a suit cognizable by the Court of Small Causes, a Second Appeal will not lie against an order passed in execution of such a decree. While dealing with the said objection, the Division Bench held thus: JENKINS, C.J.:-This is an appeal arising out of an application in execution of a decree. That decree was passed in a suit of the nature cognizable in the Court of Small Causes, and it has been established by a number of reported decisions of which, so far as we are aware, Shyama Charan Mitter v. Debendra Nath Mukerjee (1906) 30 Bom. 113 is the last, that no Second Appeal lies. Though there is not reported case of this Court on the point, we think we ought to follow these decisions. We must accordingly give effect to the preliminary objection and dismiss this appeal with costs. Thus, this Court held that if against the decree passed in the suit, a Second Appeal is barred, a Second Appeal against an order passed in execution of such decree is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was maintainable. Correctness of this determination regarding maintainability was the subject matter of challenge before the Supreme Court. The Supreme Court considered provisions of section 39 of 1940 Act and the Letters Patent. After a complete analysis of the legislative history regarding enactment of Code of Civil Procedure 1877, replaced by Code of Civil Procedure, 1882 and further replaced by Code of 1908, the Supreme Court ultimately held thus : Prior to 1940 the law relating to contractual arbitration (except in so far as it was dealt with by the Arbitration Act of 1899) was contained in the Code of Civil Procedure and certain orders passed by courts in the course of arbitration proceedings were made appealable under the Code of 1877 by s. 588 and in the Code of 1908 by s. 104. In 1910, the legislature enacted Act X of 1940, repealing schedule 2 and s. 104(1) cls. (a) to (f) of the Code of Civil Procedure 1908 and the Arbitration Act of 1899. By s. 39 of the Act, a right of appeal was conferred upon litigants in arbitration proceedings only from certain orders and from no others and the right to file appeals from appellate orders was expressly taken away by sub-s. 2 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly Company 19621 3 S.C.R. 497. The Court after going into detail and examining various authorities given by different High [Courts held that no, second appeal lay under Section 39(2) against a decision given by a Learned Single Judge under Section 39(1). In respect of the jurisdiction under Letters Patent the Court observed that since Arbitration Act was a consolidating and amending act relating to arbitration it must be construed without any assumption that it was not intended to alter the law relating to appeals. The Court held that in view of bar created by sub-section (2) of Section 39 debarring an, second appeal from an order passed in appeal under sub-section (1) the 'conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39'. Therefore, so far the second part is concerned, namely, the maintainability of the appeal under Letters Patent it stands concluded by this decision. 4. The Learned counsel for the appellant vehemently argued that since the decision by the Supreme Court was in respect of an appeal directed against an order passed by a Learned Single Judge in exercise of appellate jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction Company (2001) 8 SCC 470, the Supreme Court had an occasion to consider the applicability of the provisions of section 5 of the Limitation Act, 1963 to an arbitration petition under section 34 of the 1996 Act and the Supreme Court has observed thus in paragraphs 16: 16. Furthermore, section 34(1) itself provides that recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub Section 2 and sub Section 3. Sub Section 2 relates to grounds for setting aside an award and is not relevant for our purposes. But an application filed beyond the period mentioned in Section 34, sub section (3) would not be an application in accordance with that sub section. Consequently by virtue of Section 34(1), recourse to the court against an arbitral award cannot be made beyond the period prescribed. The importance of the period fixed under Section 34 is emphasised by the provisions of Section 36 which provide that where the time for making an application to set aside the arbitral award under Section 34 has expired.......the award shall be enforced under the Code of Civil Procedure, 1908 in the same manner as if it were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of decisions have been relied upon by the learned counsel for the parties in support of their rival contentions. Dealing with the Judgments of the Supreme Court in the cases of Nilkantha Sidramappa Ningashetti vs. Kashinath Somanna Ningashetti AIR 1962 SC 666 : (1962) 2 SCR 551, State of West Bengal (supra) and Mohinder Supply Company(supra), the Supreme Court observed thus : We, however, find that so far as this case is concerned, it stands on a different footing since in the present case it is not a further appeal or a second appeal but an appeal against an order passed by the learned Single Judge under Order IX Rule 13 CPC. It would however be relevant for the purpose that restriction on appeal under Section 39 of Arbitration Act shall be applicable to appeals under any provision of law, may be CPC or Letters Patent. Thereafter, following observations and the ultimate conclusion in paragraph 13 read thus : In view of what has been held above a Court while exercising power by virtue of Section 41 of the Arbitration Act shall have all other related powers of the ordinary civil court subject to the constraints contained in the special Act itself. Normally, an appeal would be mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is conferred against the specified orders and against no other orders; and from an appellate order passed under sub-section (1) no second appeal except an appeal to Supreme Court lies. In order that an appeal may lie against an order, it must be shown to be one included in any of the clauses (i) to(iv) of sub-section (1) of section 39 of the Act since an appeal being a creature of statute, the right of appeal can not be extended by implication and the legislature has plainly expressed itself that the right of appeal against orders passed under the Act may be exercised only in respect of certain orders. The right to appeal against other orders is expressly taken away. And after noting the earlier judgment of the Supreme Court in the case of State of West Bengal (supra) and Mohindra Supply Co. (supra) and various other judgments of the Division Bench of this court, the Division Bench held in para 10 thus : 10..... The Bank is not a party to the arbitration pending between the Appellants and Respondents. The claim relating to enforcement of the said bank guarantees is not referable to arbitration. However, in our view, the application by way of Petition made by the Respondents for g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, it was held that no appeal therefrom could be filed. After considering the scheme of Section 588 of Code of 1877, Code of Civil Procedure 1882 and Section 104 of the Code of Civil Procedure 1904 and considering judgment of the privy Council in Harish Chunder Chowdhary vs. Kali Sundari Debia 10 IA 4 (P.C.) 17 10 : IA 4 (P.C.) 17 and interpreting the words and save as otherwise expressly provided in the body of this Code or by any law for the time being in force , the Division Bench has held thus in paragraphs 14 to 16 : 14....... Section 39(1) of the Act is modelled upon section 104 of the Code and the words, which were added deliberately in order to save the right under the Letters Patent, were specifically omitted when section 39(1) of the Act was enacted. Therefore, even section 39(1) of the Act takes away the right of appeal given by Clause 15 of the Letters Patent. If all that was intended to provide by sub-section (1) of section 39 of the Act was to give a right of appeal, there was no necessity, int eh first instance, to add to it the words and from no others. The combined effect of the words and from no others and the omission of the words and save as otherwise exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 39 of the Act interpreted by the Supreme Court in State of West Bengal v. M/s. Gourangalal Chatterjee 2, 1993 (3) S.C.C.1. In that case, an identical question arose before the Apex Court as to whether a Letters Patent Appeal would be maintainable before a Division Bench of the High Court against an order passed by a Single Judge of the High Court, when no such right was conferred by the statute. Dealing with the relevant provisions of the Act, and considering earlier decision in Union of India v. Mohindra Supply Co. 3, A.I.R. 1962 S.C. 256, the Court held that no such appeal would lie. It is also pertinent to note that Mohindra Supply Co. was as case under section 39 of the Act. A similar view was taken by a Division Bench of this Court in Municipal Corporation of Greater Bombay v. Patel Engineering Co. Ltd. 4, 1994(3) Bom. C.R.139: 1994 Bank. J. 492(Bom): 1994 Mh.L.J. 90, wherein the Division Bench considered Gourangalal Chatterjee, as also other cases, and held that an appeal would not lie. 12. In view of the fact that the question which came up for consideration before the Supreme Court in Mohindra Supply Co. as well as Gouranglal Chatterjee related to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Civil Procedure, 1908. 23. Judgment of the Supreme Court in the case of Shah Babulal Khimji (supra) has been very heavily relied upon in support of the maintainability of the appeals and the observations in paragraphs 28 to 34 and 47 of the said Judgment are relied upon and we quote the relevant portion : 28. We find ourselves in complete agreement with the arguments of Mr. Sorabjee that in the instant case s. 104 read with Order 43 Rule 1 does not in any way abridge, interfere with or curb the powers conferred on the Trial Judge by cl. 15 of the Letters Patent. What s. 104 read with order 43 Rule 1 does is merely to give an additional remedy by way of an appeal from the orders of the Trial Judge to a larger Bench. Indeed, if this is the position then the contention of the respondent that s. 104 will not apply to internal appeals in the High Courts cannot be countenanced. In fact, the question of application of the Code of Civil Procedure to internal appeals in the High Court does not arise at all because the Code of Civil Procedure merely provides for a forum and if order 43 Rule 1 applies to a Trial Judge then the forum created by the Code would certainly include a forum within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of maintainability of LPA against an order passed in execution in the case of Laxman Bala Surve ors. vs. M/s. Pesh Builders 1997(1) BCR 115. There an order passed under Order 21 Rule 22 making show cause notice absolute was challenged by filing LPA and a preliminary objection regarding maintainability was raised. Dealing with this objection and after considering the judgment in the case of Shah Babulal Khimji(supra) the Division Bench has held that an order passed in a show cause notice under Order 21 Rule 22 was a judgment within the meaning of clause 15 of the Letters Patent and hence appeal was maintainable. 25. In the case of P.S. Sathappan vs. Andhra Bank Ltd. and Ors. (2004)11 SCC 672, Constitution Bench of the Supreme Court had occasion to consider whether the provisions of sub-section 2 of section 104 constitute a bar to the maintainability of Letters Patent Appeal under clause 15 of the Madras High Court. The majority judgment of S.N. Variava,J, B.P. Singh,J and H.K. Sema,J held thus in paragraph 6. 6..... 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 Leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven a Letters Patent Appeal would be barred. 29. Thus, the consensus of judicial opinion has been that Section 104(1) Civil Procedure Code expressly saves a Letters Patent Appeal. At this stage it would be appropriate to analyze Section 104 C.P.C. Sub-section (1) of Section 104 CPC provides for an appeal from the orders enumerated under sub-section (1) which contemplates an appeal from the orders enumerated therein, as also appeals expressly provided in the body of the Code or by any law for the time being in force. Sub-section (1) therefore contemplates three types of orders from which appeals are provided namely, 1) orders enumerated in sub-section (1). 2) appeals otherwise expressly provided in the body of the Code and 3) appeals provided by any law for the time being force. It is not disputed that an appeal provided under the Letters Patent of the High Court is an appeal provided by a law for the time being in force. 30. As such an appeal is expressly saved by Section 104(1). Sub-clause 2 cannot apply to such an appeal. Section 104 has to be read as a whole. Merely reading sub-clause (2) by ignoring the saving clause in sub-section (1) would lead to a conflict between the two s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Judgment of the learned Single Judge(D.Y.Chandrachud,J) in Eskay Engineers vs. Bharat Sanchar Nigam Ltd. 2009 (6) Bom. C.R. 176 and it was contended that the said Judgment lays down a proposition that the expression all subsequent applications arising out the arbitral proceedings used in section 42 of the 1996 Act must be read in comprehensive manner to include recourse to execution proceedings. However, said judgment is an authority only for the purpose of deciding the issue as to which court is competent to entertain an application for enforcement of the award under section 36 of the 1996 Act. In fact, the learned Single Judge has held as under in paragraph-10 of the report : The submission which was urged on behalf of the judgment debtor is that the application of the Arbitration and Conciliation Act, 1996 concludes with the delivery of the arbitral award and the forum for initiating proceedings for execution cannot be traced to any provision of the Act. That would not be an accurate reading of the language and the provisions of the Act. Section 36 specifically speaks of enforceability and Section 42 of jurisdiction. The expression all subsequent applications arising out arbit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the amendment is retrospective in operation. 28. In our opinion, since we have reached a conclusion that the proceedings under section 36 of the 1996 Act are not proceedings under the Code, this issue really becomes academic. However, if our first conclusion on point No. 1 were that the proceedings under section 36 are proceedings under the Code of Civil Procedure, 1908; then considering the nature of proceedings and adjudication done by the learned Single Judge which is a subject matter of the present appeals, would certainly be a judgment under clause 15 of the Letters Patent of High Court, Bombay. In that eventuality, present appeals would have been maintainable since the proceedings before the Ld. Single Judge were original proceedings and as held by the Constitution Bench majority view in P.S.Sathappan (Supra), since there is no express bar u/s. 104(1) of the Code or in section 100A as amended following the ratio in the case of P.S. Sathappan (Supra) and the Judgment of this Court in Laxman Bala Surve (Supra) and of the Supreme Court in Shah Babulal Khimji (supra), it would have been required to be held that appeals were maintainable. However, in view of our conclusion on P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeding, 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. (b) Before the Supreme Court, there were 6 cases which were being heard, one of which was de-linked and 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 had come before the Supreme Court against the order passed by the division bench only, on the question of maintainability of their appeals. Civil Appeal No. 36 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. (d) Thereafter regarding said difference, the Supreme Court has observed thus : 42. Having regard to the grammatical use of brackets or parentheses, if the words, (and from no others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal change in that where the court is satisfied that the foreign award is enforceable, the award itself would be deemed to be a decree of the Court. It, thus, not only omits the procedural formality for the court to pronounce judgment and a decree to follow on that basis but also completely removes the possibility of the decree being in excess of, or not in accordance with the award. Thus, even the limited basis on which an appeal would lie under sub-section (2) of section 6 of the 1961 Act, is taken away. There is, thus, no scope left for an appeal against an order of the court for the enforcement of a foreign award. It is for this reason that section 50(1)(b) provides for an appeal only against an order refusing to enforce a foreign award under section 48. 59. There can be no doubt that under section 6, except on the very limited ground, no appeal including a Letters Patent Appeal was maintainable against the judgment and decree passed by the Court under section 6(1). It would be futile, therefore, to contend that though the present Act even removes the limited basis on which the appeal was earlier maintainable, yet a Letters Patent Appeal would lie notwithstanding the limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... history, and if regard be had to the legislative history and the dictum of the Privy Council in Hurrish Chunder Chowdry v. Kali Sundari Debia (1882) L.R.10 I.A. 4, 17 which has been universally followed, in considering the extent of the right of appeal under the Letters Patent, the Court would not be justified in restricting the right of appeal which was exercisable till 1940 by litigants against decisions of single Judges of High Courts in arbitration matters from orders passed in appeals. In considering the argument whether the right of appeal which was previously exercisable by litigants against decisions of single Judges of the High Courts in appeals from orders passed in arbitration proceedings was intended to be taken away by s. 39(2) of the Indian Arbitration Act, the Court must proceed to interpret the words of the statute without any predisposition towards the state of the law before the Arbitration Act was enacted. The Arbitration Act of 1940 is a consolidating and amending statute and is for all purposes a code relating to arbitration..... 70. And (SCR pages 512-513): Prior to 1940 the law relating to contractual arbitration (except in so far as it was dealt with by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bench decision of this Court in P.S. Sathappan, and the way the constitution bench understood and interpreted Mohindra Supply Co. would be clear from the following paragraph 10 of the judgment: 10.....The provisions in the Letters Patent providing for appeal, in so far as they related to orders passed in Arbitration proceedings, were held to be subject to the provisions of Section 39(1) and (2) of the Arbitration Act, as the same is a self-contained code relating to arbitration. 72. It is, thus, to be seen that Arbitration Act 1940, from its inception and right through 2004 (in P.S. Sathappan) was held to be a self-contained code. Now, if Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL Model must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carries with it a negative import that only such acts as are mentioned in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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