TaxTMI 
TaxTMI 
2011 (10) TMI 783
X X X X Extracts X X X X
X X X X Extracts X X X X
....APP 345/2011 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n time, since the Supreme Court of India had delivered 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 Ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... selling shareholders were to sell, transfer and deliver to the purchaser free from 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esolve all the disputes existing between them and all the issues that arose in the arbitration. Accordingly, (i) All claims and 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 Execut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dge on Computation and conclusions. 7. The conclusions can be summarized as under : Computation To obviate any controversy on the mathematical 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 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity of these Appeals in proper perspective, we deem it fit to note certain relevant provisions of the Arbitration and Conciliation Act, 1996 (1996 Act), Letters Patent of the High Court, Bombay, Code of Civil Procedure, 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rd. Section 49 and 50 falling in Chapter I in Part II are of some relevance since the Judgment of the Supreme Court in the case of Fuerst Day Lawson (supra) interprets the scope of appeals under section 50 which is almost pari materia section 37(1) and 37(3) save and 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....epealed sub-clauses (a) to (f) of Section 104(1) of the Code. The said Act applied only to the domestic arbitration and domestic awards. Section 14 provided for making of award and filing award in court and section 17 provided for the power of the court either to set aside the award or pronounce judgment. Said section 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....both the appeals argue in favour of their maintainability, we will have to independently consider the question of maintainability particularly when it is also a well established law that even by consent of the parties jurisdiction which is otherwise not conferred on the Court cannot be assumed by the Court and an appeal otherwise not maintainable cannot 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 Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder Part-I of the Act. Consequently, the observations of the Supreme Court in paragraphs-73 and 74 of the Judgment in the case of Fuerst Day Lawson (supra) must be held to be confined to maintainability of the Letters Patent Appeal arising out proceedings under Part-II of the Act and not under Part-I of the Act. (e) There is neither an express exclusion 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er any appeal would lie from a Judgment rendered by the executing court will have to be considered only in the context of clause 15 of the Letters Patent and for determining this question about maintainability, the provisions of the 1996 Act will have to be completely ignored. (c) The provisions of the 1996 Act do not have any application whatsoever to proceedings adopted in execution of 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 Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... arbitration and any other orders. To hold that orders in execution arising out of arbitral proceedings are not appealable, but orders in execution arising from decrees being judgments (within the meaning of Clause 15 of Letters Patent) and therefore appealable, would bring about an artificial distinction, which has not been made. The Act is clear that all awards which are final and binding under 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 ot....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authority which is applicable only in respect of a foreign award covered by Part II of the 1996 Act or whether the ratio of the said Judgment is a binding precedent even in respect of proceedings under part I of the 1996 Act or the same is obiter dicta? A. Nature of proceedings under section 36 of the 1996 Act. (a) Section 36 of the 1996 Act uses the words "the award shall be enforced under the Code of Civil Procedure, 1908 (5 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 fundamenta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ose. They further show that a legal fiction must be limited to the purpose for which it was created. 42. The words "as if" demonstrate that award and decree or order are two different things. The legal fiction created is for the limited purpose of enforcement as a decree. The fiction is not intended to make it a decree for all purposes under all statutes, whether State or Central. 43. For the foregoing discussions we hold : i) That no insolvency notice can be issued under Section 9(2) of the Presidency Towns 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....preme Court has already interpreted the words "as if it was a decree of the court" which clearly shows that only the procedure for enforcement of a decree passed by the Civil Court is to be utilised for enforcement of an award and, merely on that ground, the said proceedings do not become proceedings under the Code. In our opinion, they continue to be proceedings under the 1996 Act. In fact section 19 of the 1996 Act also makes it clear that the provisions of the Code do not apply to the arbitration proceedings. This is a departure from the 1940 Act in as much as under section 41 of the said 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Division Bench of the Calcutta High Court has considered the provision of Section 9 of the Specific Relief Act, 1877 which was pari materia Section 6 of the Specific Relief Act. The Calcutta High Court took the view that the term "suit" includes execution proceedings on the basis of the decree in the suit. Hence, it was held that an appeal against an order passed in execution of decree passed in such a suit under Section 9 of the said Act of 1877 will not lie. The Division Bench of the Calcutta High Court relied upon a decision of this Court in the case of Narayan Parmanand v. Nagindas Bhaidas (1906) 30 Bom. The said decision dealt with a Second 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. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as filed in the court and an application for setting aside the award was rejected and that order was challenged in an appeal which was allowed on the ground that the dispute could not be referred to arbitration under the contract. Against this order a further appeal was preferred under clause 10 of the Letters Patent of the High Court of Lahore (which is almost pari materia clause 15 of the Letters Patent of the High Court at Bombay). Since the question regarding maintainability of this LPA was raised it was referred to the Full Bench of the Punjab High Court which held that notwithstanding the prohibition contained in section 39(2) of the 1940 Act, the Letters Patent Appeal 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r. ..... In our view the legislature has made a deliberate departure from the law prevailing before the enactment of Act X of 1940 by codifying the law relating to appeals in s. 39. (b) In State of West Bengal vs. Gauranglal Chatterjee (1993) 3 SCC 1 in an arbitration proceedings the learned Single Judge of the Calcutta High Court passed an order revoking the authority of the Chief Engineer to act as an arbitrator and appointed a sole arbitrator. A Letters Patent Appeal was filed by the State Government which was held not to be maintainable. In this context the Supreme Court has observed thus : 3. Section 39 of the Arbitration Act came up for consideration in Union of India v. Mohindra Supply 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inted out by Mr. Chidambaram, this Court in the case of Nirma Ltd. (supra) while dismissing an SLP by a reasoned judgment has held : "In our opinion, an efficacious alternate remedy is available to the petitioner by way of filing a revision in the High Court under Section 115 of the Code of Civil Procedure. Merely because a second appeal against an appellate order is barred by the provisions of sub-section (3) of Section 37, the remedy of revision does not cease to be available to the petitioner, for the City Civil Court deciding an appeal under sub-section (2) of Section 37 remains a court subordinate to the High Court within the meaning of Section 115 of the C.P.C. (d) In Union of India vs. Popular Construction 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 Sect....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was maintainable. It was alternatively contended that in any case against the Judgment of learned Single Judge an appeal under clause 15 of the Letters Patent was maintainable. The Supreme Court has recorded conclusions in paragraph 8 part as under: We find that prohibition against appeal is provided in two ways one where it is indicated that appeal would lie against given orders and from no other orders and secondly under sub-section (2) of Section 39 that no second appeal shall lie from an order passed in appeal under Section 39 of the Arbitration Act. In the alternate, the Appellants' contention is that in any case a Letters Patent Appeal would lie against the original orders of the Single Judge of the High Court to a Division Bench. A number 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 concerne....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rbitration agreement in this court and for an order of reference and accordingly a sole arbitrator was appointed and pending those proceedings a petition under section 41 of the 1940 Act was filed for restraining the Municipal Corporation from encashing or receiving the bank guarantee in which the learned single judge passed an order dated 27/1/1993 which was challenged in an appeal before the Division Bench. An objection regarding maintainability of such an appeal was raised. After considering the scheme of the 1940 Act visa vis Letters Patent the Division Bench has observed thus in paragraph 6; The two sub-sections of section 39 are manifestly part of a single legislative pattern. The language of the section is plain and unambiguous. By sub-section (1) the right to appeal 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ben B. Khakhar 1986 Mh. L.J. 931 it was held in paragraph 13 as under : It may be mentioned here that in view of the decision of the Supreme Court in State of West Bengal v.s M/s. Gouranglal Chatterjee (supra) following its earlier decision in the Mohindra Supply Co. (supra) wherein it has been held that appeal could be only from the orders mentioned in sub-section (1) of section 39 of the Act, the decision of the Division Bench of this Court in the case of Vasudev C. Wadhwa (supra) has by implication been overruled. Since the order passed by the learned Single Judge in the case of State of West Bengal (supra) revoking the authority of the Chief Engineer on his failure to act as an arbitrator was not covered in either of the six clauses mentioned in sub-clause (1) of section 39 of 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the present petition does not fall in any of the categories specified in Clauses (i) to (vi). Since the Judgment of the Supreme Court in the case of Vinita M. Khanolkar vs. Pragna M. Pai and Ors. 1998(1) SCC 500 : 1998(4) was relied upon in support of plea of maintainability of appeal, the Division Bench has observed thus in paragraphs- 10 to 12 as under : 10...... The endeavour of the learned Counsel for the appellant is that while construing and interpreting the provisions of section 39 of the Act also, this Court will have to bear in mind the ratio laid down in Vinita Khanolkar, and it must be held that the appeal is maintainable, notwithstanding what is stated in sub-section (1) of section 39 of the Act. 11. No doubt, the argument is attractive, but, in our opinion, the learned Counsel for the respondent is right in placing reliance on the provisions 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l against only some specified orders and do not provide for an appeal against every order passed in the proceedings under the 1996 Act. It is well established that general law cannot defeat a provision of special law to the extent to which they are in conflict; else effort has to be made on reconciling the two provisions by homogeneous reading. In the present case, the provisions of section 37 (the relevant portion of which is pari materia relevant portion of section 39 of 1940 Act) leave no manner of doubt that the provisions of the special enactment will prevail over the general law namely, the 1908 Code. The Statutory Scheme of 1996 Act and the Letters Patent and the binding precedents of Supreme Court and this Court lead us to only one conclusion that clause 15 of the Letters Patent are impliedly excluded by the 1996 Act. 2) Implied exclusion by the Code of 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 our....
X X X X Extracts X X X X
X X X X Extracts X X X X
....foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a particular party, it doubtless amounts to a judgment. As we have already pointed out apart from these observations this Court refused to embark on an enquiry as to in what cases an order passed by a Trial Judge would be a 'judgment' for purposes of appeal before a larger Bench. Clause 15 makes no attempt to define what a judgment is. As Letters Patent is a special law which carves out its own sphere, it would not be possible for us to project the definition of the word 'judgment' appearing in s. 2(9) of the Code of 1908, which defines 'judgment' into the Letters Patent: "judgment' means the statement given by the Judge of the grounds of a decree or order. 24. The Division Bench of Dr. B.P. Saraf and M.S. Rane, JJ had an occasion to consider the question 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....966) 2 was considered and it was held in paragraph 14 thus: 14..... Thus, a Constitution Bench of this Court has held that the words "under any law for the time being in force" in Section 104(1) saves Letters Patent Appeals. This decision is binding on this Court. The ultimate conclusions of the majority judgment are drawn in paragraphs 22, 29 to 32 which read thus : 22. Thus the unanimous view of all Courts till 1996 was that Section 104(1) C.P.C. specifically saved Letters Patent Appeals and the bar under 104(2) did not apply to Letters patent Appeals. 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 words "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. 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.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ove principle to the facts of this case, the appeal under Clause 15 of the Letters Patent is an appeal provided by a law for the time being in force. Therefore, the finality contemplated by Sub-section (2) of Section 104 did not attach to an Appeal passed under such law. 32..... It is well settled law, that in the event of a conflict between a special law and a general law, the special law must always prevail. We see no conflict between Letters Patent and Section 104 but if there was any conflict between a Letters Patent and the Civil Procedure Code then the provisions of Letters Patent would always prevail unless there was a specific exclusion. This is also clear from Section 4 Civil Procedure Code which provides that nothing in the Code shall limit or affect any special law. As set out in Section 4 C.P.C. only a specific provision to the contrary can exclude the special law. The specific provision would be a provision like Section 100A." 26. Reliance was placed by Mr. Nariman on the 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 proposit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R 1983 Bom 378, Mr. Nariman has sought to distinguish the said Judgment. The said Judgment deals with the amendment effected by Act No. 104 of 1976 whereby Code was exhaustively amended. In this Judgment the Division Bench has considered the effect of exclusion of the words "section 47 or" from the definition of the term "decree" under section 2(2) of the Code. The following observations were made : As we are in respectful agreement with the view taken by the Full Bench of the Allahabad High Court it is not necessary to make detailed reference to the several decisions cited before us. In our opinion the intention of the legislature is quite clear from the omission of the words "Section 47 or" from Section 2(2) of the Code. It is well settled that if two interpretations of a provision are possible then one which is in tune with the intention of the legislature should preferred. If the provisions of Section 2(2) as amended, and Secs. 97(2), 97(3) and 99A are read together, and harmoniously then it is quite clear to us that the amendment is retrospective in operation. 28. In our opinion, since we have reached a conclusion that the proceedings under s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bject 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 i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 37 of the Arbitration and Conciliation Act 1996 vis a vis section 50 of the 1996 act in so far as section 37 uses the words "(and from no others)" which are absent in section 50. The same read as under: 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 be subject to appeal under the Letters Patent of the High 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 &q....
X X X X Extracts X X X X
X X X X Extracts X X X X
....quot;and from no others" which are not to be found in section 50 of the Act. Section 37 and section 50 are not comparable because they belong to two different statutory schemes. Section 37 containing the provision of appeal is part of a much larger framework that, as seen above, has provisions for the complete range of law concerning domestic arbitration and international commercial arbitration. Section 50 on the other hand contains the provision of appeal in a much limited framework, concerned only with the enforcement of New York Convention awards. In one sense, the two sections, though each containing the appellate provision belong to different statutes. 53. Having come to this conclusion, it would appear that the decisions rendered by the Court on the interplay between section 39 of the 1940 Act and the Letters Patent jurisdiction of the High Court shall have no application for deciding the question in hand. But that would be only a superficial view and the decisions rendered under section 39 of the 1940 Act may still give the answer to the question under consideration for a very basic and fundamental reason. 58. Section 49 of the present Act makes a radical change in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring on the present controversy. But, in that decision observations of great significance were made in regard to the nature of the 1940 Act. It was observed (SCR page 500): The proceedings relating to arbitration are, since the enactment of the Indian Arbitration Act X of 1940, governed by the provisions of that Act. The Act is a consolidating and amending statute. It repealed the Arbitration Act of 1899, Schedule 2 of the Code of Civil Procedure and also cls. (a) to (f) of s. 104(1) of the Code of Civil Procedure which provided for appeals from orders in arbitration proceedings. The Act set up machinery for all contractual arbitrations and its provisions, subject to certain exceptions, apply also to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that, other enactment were an arbitration agreement, except in so far as the Arbitration Act is inconsistent with that other enactment or with any rules made thereunder........ 69. It was further observed and held (SCR page 506): But it was urged that the interpretation of s.39 should not be divorced from the setting of legislative his....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in operation was expressly preserved. There is in the Arbitration Act no provision similar to s. 4 of the Code of Civil Procedure which preserves powers reserved to courts under special statutes. There is also nothing in the expression "authorised by law to hear appeals from original decrees of the Court" contained in s. 39(1) of the Arbitration Act which by implication reserves the jurisdiction under the Letters Patent to entertain an appeal against the order passed in arbitration proceedings. Therefore, in so far as Letters Patent deal with appeals against orders passed in arbitration proceedings, they must be read subject to the provisions of s. 39(1) and (2) of the Arbitration Act. Under the Code of 1908, the right to appeal under the Letters Patent was saved both by s. 4 and the clause contained in s. 104(1), but by the Arbitration Act of 1940, the jurisdiction of the Court under any other law for the time being in force is not saved; the right of appeal can therefore be exercised against orders in arbitration proceedings only under s. 39, and no appeal (except an appeal to this Court) will lie from an appellate order." 71. Mohindra Supply Co. was last re....