Exclusive statutory arbitration procedure for companies under the Companies Act displaced Civil Procedure Code alternatives.

Section 152 of the Indian Companies Act, 1913 was treated as a special and mandatory scheme for company arbitrations, requiring a company that referred a dispute to arbitration to use the Indian Arbitration Act, 1899. The words allowing reference "in accordance with the Indian Arbitration Act, 1899" were read as making that Act the exclusive route, and the phrase "in pursuance of this Act" was understood to apply the Arbitration Act by force of the Companies Act itself. On that construction, the territorial limitation in Section 2 of the Arbitration Act, 1899 did not restrict company arbitrations, and Schedule II of the Civil Procedure Code was not available as an alternative procedure.

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Issues: Whether, before the Arbitration Act, 1940 came into force, Section 152 of the Indian Companies Act, 1913 confined a company, when referring a dispute to arbitration, to the procedure under the Indian Arbitration Act, 1899, or left it free to proceed under the Civil Procedure Code.

Analysis: The provision was construed as a special and mandatory scheme for company arbitrations. The words "may by written agreement refer to arbitration in accordance with the Indian Arbitration Act, 1899" were read as imposing the only permissible mode of reference for companies, and the words "in pursuance of this Act" in the later sub-section were treated as making the Arbitration Act applicable by force of the Companies Act itself. The Court held that the territorial restriction in Section 2 of the Indian Arbitration Act, 1899 was displaced for companies by Section 152, and that Schedule II of the Civil Procedure Code did not remain available as an alternative route for such arbitrations.

Conclusion: A company could only refer a dispute to arbitration under the Indian Arbitration Act, 1899, and was not entitled to resort alternatively to Schedule II of the Civil Procedure Code.

Ratio Decidendi: Where a company statute prescribes a specific mode for arbitration, that mode is exclusive and the permissive word "may" may be read as "must" to exclude other inconsistent procedures.

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