TaxTMI 
TaxTMI 
2002 (1) TMI 1251
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.... therefore, this order is confined to the question of maintainability of the appeal under the said provision of law. 2. Before coming to the real controversy between the parties, it is necessary to refer to the background leading to the orders/findings of the sole arbitrator which are sought to be assailed in these appeals. Disputes having arisen between the parties, the parties entered into a Memorandum of Understanding (the MOU) dated 8-1-1999 which, inter alia, stipulated that in case of difference of opinion on any matter and if a settlement is not arrived at, the matter will be referred to the arbitration by Hon'ble Mr. Justice A.M. Ahmadi (former Chief justice of India) as the sole arbitrator. Pursuant to the said MOU, the arbitral proceedings commenced before the sole arbitrator. 3. During the course of the proceedings, an application dated 7-4-2001 under section 17 of the Act was moved on behalf of the respondents Vikram Kapur and Rajiv Kapur for a direction on the appellant herein to disclose the shareholding structure and the composition of the board of directors of Limrose and for restraining the said company through the appellants from dealing with or in any way e....
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....of Ernst & Young), who submitted the report dated 13-6-2001 to the sole arbitrator. On 15-6-2001, the sole arbitrator forwarded a copy of the said report to the appellant for his perusal and comments, if any, by 23-6-2001. It appears that the appellant offered his comments/objections to the said report by fax on 20-6-2001, but a hard copy thereof was furnished to the counsel for the respondent only at the time of 29th hearing held on 10-7-2001. The same were forwarded to Ernst & Young for their remarks. It appears that the subsequent hearings scheduled for 17-7-2001 and 21-7-2001, 27-7-2001 and 1-8-2001 could not take place for one or the other reason. 6. At the 30th hearing held on 9-8-2001, an application dated 8-8-2001 was filed on behalf of the appellant praying for modification of orders dated 12-4-2001, 24-4-2001, 12-5-2001 and 26-7-2001 and for sine die adjournments of the proceedings. During the course of the said hearing, another application was moved on behalf of the appellant to examine Shri Jayesh Desai of Ernst & Young who forwarded the report and S/Shri Prashant Shekhar and Rahul Singh who assisted Shri Manoj Gupta in the task undertaken by him, the said applicatio....
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.... in such specialized review processes, to carry out the review. Mr. Sundram desired to question Jayesh Desai under whose supervision the review was undertaken but since there was no advance notice the said Jayesh Desai was not present. Manoj Gupta was present and he was questioned at length and his examination was recorded in question and answer form. The trend of questioning was to question the report on the ground that the expert appointed by consent was Ernst & Young and of Batliboi & Co. It appears from his examination that S.R. Batliboi & Co. is the representative of Ernst & Young Pvt. Ltd. in India and they both are part of Ernst & Young International. He has stated that S.R. Batliboi & Co. are registered as representative of Ernst & Young International with the Institute of Chartered Accountants Since Manoj Gupta is a partner in S.R. Batliboi & Co. a Chartered Accountant firm which is a representative of Ernst and Young International, the parent body, I do not see what objection there could be to him and his team mates carrying out the review entrusted to them by Ernst & Young. In fact even on earlier occasions Manoj Gupta did not represent Ernst & Young at the hearing vide ....
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....nder sub-section (1)." 9. The answer to the question whether these appeals are maintainable or not under section 37 will solely depend on the answer to the question whether the order/findings of the sole arbitrator dated 19-8-2001 and 10-9-2001 are the orders made under section 17(1). In order to show that these orders are appealable orders under section 37, the learned counsel for the appellant has extensively referred to various proceedings taken up before the sole arbitrator and more especially those commencing with an application dated 7-4-2001 filed on behalf of the respondents Vikram Kapur and Rajiv Kapur under the provisions of section 17 seeking certain directions in relation to the board of directors, and affairs of Limrose. This was followed by another application dated 9-4-2001 by the abovenamed respondents praying to the arbitrator to give directions for the removal of appellant Arun Kapur from the membership of the JMC and in the alternative to pass an order directing that the strength of the JMC be enhanced to six members comprising of two members from each one of the family. Reference has also been made to an application on behalf of the appellant Arun Kapur under....
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....quest of a party, make available to that party for examination all documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report." 11. The learned counsel for the appellant has further argued that the findings of the sole arbitrator rejecting the objections of the appellant in respect of the report dated 13-6-2001 being that of Ernst & Young, for appointment of whom, the appellant had agreed and holding that it was the report of the Ernst & Young, is an erroneous finding which goes to the root of the matter and has the effect of almost deciding the fate of arbitral reference pending before the arbitrator. Similarly, it is argued that the finding of the sole arbitrator holding that on the spot review carried out by the team headed by Shri Manoj Gupta of Batliboi & Co. is in fact a review carried out by the representation of Ernst & Young is also contrary to the factual and legal position. Further that declining the request of the appellant for examination of Jayesh Desai of Ernst & Young, author of the report dated 13-6-2001 has greatly prejudiced the appellant. According to him, all these findings and orders are liab....
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....nd the object for which the Act of 1996 has been enacted. ****** ... The Court can intervene also on an application under section 14(2) of the Act of 1996. In other words, a conjoint reading of section 5. Section 34, section 37 and section 14(2) of the Act of 1996 will show that the Court can intervene only in cases covered by section 14, section 34 and section 37." (p. 118) 13. The provisions of section 37 take generally the form of section 39 of the 1940 Act, but they are materially different from the said provision and it must be with a view to minimise the supervisory role of the Court in arbitral process which is in consonance with the spirit of the Act as contained in section 5. Sub-section (1)(a) and (b) of section 37 provide for appeals against the order of the Courts granting or refusing to grant interim measures under section 9 and setting aside or refusing to set aside an award under section 34. Sub-section (1) emphasise that appeal shall not lie against any other orders. This is a major departure from the 1940 Act whereas sub-section (1) provides for an appeal from court orders specified therein, sub-section (2) provides for an appeal to the Court from an or....
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....he application of the respondents under section 17 and also the application made on behalf of the appellant, are necessarily orders of interim measure of protection made under section 17. His next submission is that the orders are final at least on the question of the validity of the purported report of Ernst & Young and are highly prejudicial to the interest of the appellants and amount to almost deciding the said interim measure of protection. According to him the appellants cannot be asked to wait for the making of further orders relating to interim measure of protection by the arbitrator. On the other hand, the counsel for the respondent has urged that the impugned orders cannot be called to be orders relating to an interim measure of protection by any stretch of imagination. 15. On a consideration of the respective contentions put forth on behalf of the parties and having gone through the various proceedings before the sole arbitrator, this Court is of the considered view that neither the order/finding dated 19-8-2001 nor the order/finding dated 10-9-2001 can even remotely be said as order passed under section 17. At best the sole arbitrator has made certain observation whi....