TaxTMI 
TaxTMI 
2011 (10) TMI 783
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ors. in APP 456/2011 and for 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 sen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned to 19/7/2011. Accordingly, on 19/7/2011 Learned Senior Counsel commenced their submissions on the question of maintainability. In the mean 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 c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reement were as follows : (i) Subject to the provisions of the SPA, including the disclosed liabilities on the closing date, the 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tribunal passed a consent award on 12 April 2007, recording that under the Consent Terms parties had managed to resolve 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 footi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the parties before the Learned Single Judge and the findings of the Learned Single Judge. However, we deem it fit to record the conclusions of the learned Single Judge 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed of. Counsel appearing on behalf of Jet states that Chamber Summons 477 of 2011 will not survive in view of the judgment. 57. Notice 734 of 2009 shall stand marked as satisfied upon payment being made by Jet in terms of the directions given in this order. RELEVANT STATUTORY PROVISIONS 9. It is necessary to decide whether the impugned order passed by the Learned Single Judge is an order passed in proceedings under section 36 of the Arbitration and Conciliation Act, 1996 or an order passed in proceedings under the Code of Civil Procedure, 1908. For determining the question about maintainability 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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction shall affect or take away any right to appeal to the Supreme Court. (g) Section 42 provides for jurisdiction and reads thus : 42. Jurisdiction.-Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court. Aforesaid are the relevant provisions in Part-I of the 1996 Act. (h) Part-II of the Act deals with enforcement of certain foreign award. 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....foresaid Act 104 of 1976 sub section 2 of section 47 of the Code was omitted. Prior to its omission, the said sub-section 2 read thus : 47(2) The Court may, subject to any objection as to limitation or jurisdiction, treat a proceeding under this section as a suit or a suit as a proceeding and may, if necessary, order payment of any additional court-fees. (c) Section 96 of the Code provides for appeal from original decree whereas section 104 provides for orders from which appeal lies. Clauses (a) to (f) of sub-section 1 of section 104 were omitted by section 49 and schedule III of Act 10 of 1940 i.e. Arbitration Act, 1940. D. ARBITRATION ACT, 1940 (a) Section 49 of the said Act (Act No. 10 of 1940) inter alia repealed 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 referr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also appearing for the Respondents in the cross-appeals submitted that the appeals are maintainable. Thus, this is a peculiar case where all the parties to the appeals are advancing an argument in support of the maintainability of the appeals. However, it is trite law that appeal is a creation of statute and a right of appeal inheres in no one and therefore an appeal for its maintainability must have a clear authority of law and that explains why the right of appeal is described as a creature by Statue. See Ganabai vs. Vijay Kumar & Ors. AIR 1974 SC 1126: 1974(2) SCC 393. Right of appeal is not a mere matter of procedure, but is a substantive and vested right to be governed by a law and can be held to be barred only if it is expressly barred or is barred by necessary implication. It is in this context that though all the parties in 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....considered to be a special enactment so as to override the general law/enactment relating to maintainability and procedure for filing of appeals as contained in the clause 15 of the Letters Patent of High Court Bombay. In other words, there is no provision in Part-I of the 1996 Act which would exclude the applicability of clause 15 of the Letters Patent to any proceedings under Part-I or any orders arising out of any proceedings in Part-I. (d) The scheme of section 49 and 50 which are in Part-II of the 1996 Act and the nature and the character of the 1996 Act as a self contained and an exhaustive code of matters contained in Part-II make it clear that no Letters Patent Appeal will lie against an order which is not appellable under section 50 of 1996 Act. Whereas similar conclusion cannot be drawn in respect of the orders passed in proceedings under 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tra Act 27 of 2008, which has restored the position existing before the passing of the 1986 Act. 14. Mr. Janak Dwarkadas, Ld. Sr. Advocate advanced the following submissions : (a) The proceedings filed before the learned Single Judge were filed in the course of execution of an award and were proceedings before the executing court and, hence, none of these proceedings were proceedings filed before the 'court' as defined by the 1996 Act. No prayer has been made to the High Court for the purpose of exercising any power or jurisdiction under the provisions of the 1996 Act. Thus, the proceedings were filed under the Code of Civil Procedure, 1908 and would be governed exclusively and entirely by the provisions of the said Code. (b) Since the High Court at Bombay is a chartered High Court having its own Letters Patent, the question whether 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 applicati....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Supreme Court in Fuerst Day Lawson (supra) nor the Judgment of the Delhi and Calcutta High Courts from which the case before the Supreme Court arose deal with the enforcement of a domestic award and all of them deal with the enforcement of foreign awards. None of these judgments were concerned with the question as to whether an appeal would lie from an Order passed by the Executing Court in enforcement of a domestic award governed by Part I of the Act. In any event none of them concerned an appeal from an order enforcing/executing and/or refusing to enforce/execute an award under Section 47 read with Order 21 of the CPC. (h) It is beyond dispute that the enforcement of an award under Part I of the Act is under the provisions of the CPC, viz. Section 47 read with Order 21. These provisions make no distinction between orders in execution arising from 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 ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a has filed a petition for special leave to appeal in the Supreme Court and has thus taken directly inconsistent and contradictory stand and must be put to election and can be permitted to prosecute only one remedy. CONSIDERATION OF SUBMISSIONS 15. For considering whether the aforesaid submissions deserve acceptance or not 3 core issues have to be determined namely- A. Whether the proceedings under section 36 of the 1996 Act are proceedings under the Code of Civil Procedure, 1908 ? B. Whether the provisions of clause 15 of the Letters Patent are applicable to the impugned Judgment and Order and whether applicability of clause 15 has been impliedly excluded by section 37 of the 1996 Act or by the amendment of section 2(2), 47 by Act 104 of 1976 amending the Code? C. Whether the Judgment of the Supreme Court in the case of Fuerst Day Lawson (supra) is an 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ency notice can be issued under Section 9(2) of the Presidency Towns Insolvency Act, 1909 on the basis of an arbitration award ? The conclusions can be seen in paragraphs 21, 23, 28, 29, 42 and 43 which read thus : 21. The words 'Court', 'adjudication' and 'suit' conclusively show that only a Court can pass a decree and that too only in suit commenced by a plaint and after adjudication of a dispute by a judgment pronounced by the Court. It is obvious that an arbitrator is not a Court, an arbitration is not an adjudication and, therefore, an award is not a decree. 23. The words 'decision' and 'Civil Court' unambiguously rule out an award by arbitrators. 28. It is settled by decisions of this Court that the words 'as if' in fact show the distinction between two things and such words are used for a limited purpose. 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 in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion proceedings. (viii) In any event, award which is incapable of execution and cannot form the basis of an insolvency notice. 16. Apart from the above binding precedent even on an independent consideration of the provisions of the 1940 Act and 1996 Act, the conclusion is inevitable that proceedings under 36 are not proceedings under the Code. As noted above, the Arbitration Act 1940 (10 of 1940) amended section 104 of the Code and sub clause (a) to (f) of sub-section 1 of section 104 of the Code, which all dealt with arbitration proceedings, were deleted. The legislative intent was thus very clear that the Code will not deal with any matter in relation to the arbitration and precisely for this reason the legislative intent would be clear namely that the arbitration proceedings and all proceedings arising therefrom will be governed only by the Arbitration Act, 1940 which has been repealed and replaced by 1996 Act. The Supreme 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... no appeal would be maintainable either under the 1996 Act or under the Code even if one accepts the contention of the learned Advocate for both parties that proceedings for implementation of award are not proceedings under the 1996 Act but are proceedings under the Code. If the aforesaid interpretation is accepted it would lead to a piquant situation where if an order in proceeding under section 36 is passed by Single Judge of High Court, the same will become appealable whereas an order passed by the Judge of the District Court will not be appealable. With a view to avoid such Startling result it would be safe and prudent to interpret the provisions of Section 36 of the 1996 Act in such manner as to hold that the said proceedings are not proceeding under the Code but the same are proceeding under 1996 Act itself. 18. In the case of Kanai Lal Ghose vs. Jatindranath Chandra AIR 1918 Cal 925, the 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 d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned Single Judge were proceedings under section 36 of the 1996 Act and cannot be held to be proceedings of execution under section 47 or order 21 of the Code of Civil Procedure, 1908. Re-Point No. 2 : 20. In this regard the question regarding implied exclusion of applicability of clause 15 of the Letters Patent has to be considered in the context of - (1) the provisions of 1996 Act, (2) the provisions of the Code. 1) Implied exclusion by the 1996 Act. 20. For considering this question it is also necessary to consider the earlier Judgments of the Supreme Court and Bombay High Court on this aspect in the context of the 1940 Act, as also to consider the Judgments under the 1996 Act. (a) In Union of India vs. Mohindra Supply Company 1961 SCR 497, AIR 1962 SC 256, the Supreme Court had an occasion to consider a similar controversy. There, an award of arbitrator passed under the 1940 Act was 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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. ..... 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....10 an interim order made by the Arbitral Tribunal was challenged in an appeal under section 37(2)(b) of the 1996 Act which was dismissed by the Civil Judge Bangalore and that order was directly challenged in the Supreme Court by raising a contention that since right of second appeal is specifically taken away under section 37(2) of the 1996 Act, by implication even right of revision under section 115 of the Code was taken away and since section 5 of the 1996 Act bars judicial intervention unless the same is specifically provided under the Part I, even a revision application was not maintainable. This argument was rejected by the Supreme Court has observed thus in paragraph 8 : 8. The question still remains as to whether when a second appeal is statutorily barred under the Act and when the Code is not specifically made applicable, can it be said that a right of revision before the High Court would still be available to an aggrieved party ? As pointed 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 r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the exclusion of the operation of Section 5 of the Limitation Act. (e) In Union of India vs. Aradhana Trading Co. & ors. (2002) 4 SCC 447 in proceedings under 1940 Act, an award was made rule of the court i.e. a judgment and decree in terms of the award was passed ex parte. Application for setting aside ex parte Judgment and Decree under Order 9 Rule 13 of the Code was filed before the learned Single Judge of the Calcutta High Court, which was dismissed and that order was challenged before the Division Bench. The Division Bench dismissed the appeal holding that it was not maintainable. Before the Supreme Court 2 submissions were advanced namely that on account of section 41 of the 1996 Act the provisions of the Code were made applicable to all proceedings before the Court and the appeals under the 1996 Act and hence the order dismissing application for setting aside the ex parte decree being an appealable order under Order 43 of the Code, the appeal 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 para....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the orders indicated in the provision and from no other order. Section 41 of the Arbitration Act makes the provisions of CPC applicable subject to the provisions of the Arbitration Act and the rules framed thereunder. Therefore, the nature of an order against which an appeal may lie must conform to the nature of the order as enumerated under sub-section (1) of Section 39 of the Arbitration Act. If it does not amount to such an order as enumerated under sub-section (1) of Section 39, the prohibition as contained in this sub-section "(against no other order") itself, would become operative, subject to which alone provisions of CPC apply under Section 41 of the Act. (f) In Municipal Corporation of Greater Bombay vs. Patel Engineering Company Limited 1994 (3) 139, the Division Bench of this Court, (S.P. Kurdukar and S.M. Jhunjhunwalla, JJ) had an occasion to consider the question of maintainability of a letters patent appeal. A suit under section 20 of the 1940 Act was filed for filing of arbitration 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 wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st be taken as it stands. It is an order which ex-facie has been made by virtue of section 41(b) of the Act. Section 39(1) of the Act does not provide for an appeal from the said order passed on the petition filed under section 41(b) read with para 4 of Second Schedule of the Act. It is not possible to hold that the impugned order passed by the learned Single Judge has been passed de hors the Act or that appeal therefrom, lies under Section 39 of the Act. Thereafter following ratio in the case of Mohinder Supply Co. (supra) and the ratio in the case of Bhavnagar Sault and Industrial Works Pvt. Ltd. vs. Surendra Overseas Ltd. A No. 43/1977, as also the Judgment of the Supreme Court in the case of Shah Babulal Khimji vs. Jayaben D. Kania AIR 1981 SC 1736: (1981) 4 SCC 8 (on which incidentally heavy reliance incidentally has also been placed by Mr. Fali Nariman in support of his argument that the appeals are maintainable.) and the Judgment of the Division Bench of this Court in the case of Vasudev C. Wadhawa vs. Muktaben 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 St....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eld. In this view of the matter, we feel that it will neither be appropriate nor proper for us to make any observations on merits. The appeal is, therefore, dismissed as not maintainable. However, in the facts of the case, there shall be no order as to costs. (g) Another Bench of this Court (C.K.Thakkar, C.J. And A.M. Khanwilkar, JJ) had an occasion to consider a similar controversy in the case of State Bank Nagar C.H.S.Ltd vs. Ashutosh Construction Pvt. Ltd. 2002(5) Bom. C.R. 567. In that case, the learned Single Judge of this court had passed an order substituting the sole arbitrator in the arbitration proceedings under the 1940 Act and the following observations were made in paragraph 5. 5. Bare reading of the above provision makes it clear that certain orders passed under the Act were made appealable, as specified in clauses (i) to (vi). Regarding other orders, it was expressly provided that no appeal lies by using the expression "and from no others". It is also not in dispute that the order impugned in 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. Kha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n which provides for an appeal. The said Section in a special statute clearly provides that an appeal shall lie only from the specified orders (specified in clause (i) to (vi) of sub-section 1 of section 39) passed under the 1940 Act and from no others. While interpreting this, various judgments referred to herein above have clearly taken a view that the aforesaid special law will prevail over the general law. The maxim -specilia generalibus derogant is a well known maxim and once a special statute is enacted, it will override the general law unless there is a specific provisions in the special Act making the provisions of the general law applicable. In the present case, the provisions of the special Act specifically exclude the applicability of the general law and hence, the conclusion is inevitable that the 1996 Act is a complete Code in itself. CONCLUSION RE-IMPLIED EXCLUSION OF CLAUSE 15 OF LETTERS PATENT BY 1996 ACT. 22. In fact a perusal of 1996 Act and the 1940 Act will indicate that both the enactments provide for filing of an appeal against only some specified orders and do not provide for an appeal against every order passed in the proceedings under the 1996 Act. It....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the argument has found favour with some of the High Courts........ It cannot be contended by any show of force that the Order passed by the Trial Judge being an interlocutory order, no appeal would lie to the Division Bench or that the provisions of the Arbitration Act giving a right of appeal to a litigant from the order of a Trial Judge to the Division Bench in any way fetter or override the provisions of the Letters Patent. 47. We find ourselves in complete agreement with the view taken and the reasons given by the three eminent Judges in the aforesaid case which furnishes a complete answer to the arguments of the respondents that order 43, Rule I will have no application to internal appeals in the High Court under the provisions of the Letters Patent. Thereafter the Supreme Court considered the scope of the word "judgment" used in clause 15 of the letters patent and its conclusions are recorded in paragraphs 101, 109, 114, 115, 120 and 122. Thus, from this case an important test that can be spelt out is that where an order which is the foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a parti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... This Court however noticed that in the Arbitration Act, there was no provision similar to Section 4 of the Code of Civil Procedure which preserved powers reserved to Courts under special statutes. Under the Code of Civil Procedure, the right to appeal under the Letters Patent is saved both by Section 4 and the clause contained in Section 104(1), but by the Arbitration Act, 1940, the jurisdiction of the Courts under any other law for the time being in force is not saved. The right of appeal could therefore be exercised against orders in arbitration proceedings only under Section 39, and no appeal lay from the appellate order (except an appeal to this Court). 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. Thereafter the Judgment of the Constitution Bench of the Supreme Court in the case of Gulab bai vs. Puniya = (1966) 2 SCR 102: AIR 1966 SC 637 (1966) 2 was considered and it was held in paragraph 14 thus: 14..... Thus, a Constitu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l under "any other law for the time being in force" is not permitted. Section 104(2) would not thus bar a Letters Patent Appeal. Effect must also be given to Legislative intent of introducing Section 4 C.P.C. and the words "by any law for the time being in force" in Section 104(1). This was done to give effect to the Calcutta, Madras and Bombay views that Section 104 did not bar a Letters Patent. As Appeals under "any other law for the time being in force" undeniably include a Letters Patent Appeal, such appeals are now specifically saved. Section 104 must be read as a whole and harmoniously. If the intention was to exclude what is specifically saved in sub-clause (1), then there had to be a specific exclusion. A general exclusion of this nature would not be sufficient. We are not saying that a general exclusion would never oust a Letters Patent Appeal. However when Section 104(1) specifically saves a Letters Patent Appeal then the only way such an appeal could be excluded is by express mention in 104 that a Letters Patent Appeal is also prohibited. 31. Applying the above principle to the facts of this case, the appeal under Clause 15 of the Letters Patent is an appeal pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urisdiction to entertain all subsequent applications arising out of the arbitral proceedings including applications in the execution of the award as a decree of the Court to the exclusion of any other Court. In our opinion, this judgment is an authority only for the proposition regarding the court to which an application for enforcement can be made and award of interests under section 31(7)(b) of the 1996 Act and does not even remotely consider on the question of maintainability of the Letters Patent Appeal. 27. Mr. Nariman also relied upon the Judgment of the Supreme Court in the State of Haryana & ors. vs. S.L. Arora & Company (2010) 3 SCC 690. According to our opinion even this judgment deals only with the issue of award of interest under section 31(7) and is not of much assistance for determining the question of maintainability of the appeals. Initially, since the counsel for the Jet Airways relied upon the judgment of the Division Bench of this Court in the case of Rameshkumar Swarupchand Sancheti & Anr. vs. Rameshwar Vallabhram Bhalwal (Dharmadhikari and Aggarwal, JJ) AIR 1983 Bom 378, Mr. Nariman has sought to distinguish the said Judgment. The said Judgment deals with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntroversy about maintainability is covered by the Judgment of the Supreme Court in Fuerst Day Lawson (supra). 29. It is now necessary to consider the submissions about the Judgment of the Supreme Court in the case of Fuerst Day Lawson (supra). (a) In the latest judgment delivered by the Hon'ble Supreme Court on 8/7/2011 in SLP (Civil) No. 11945 of 2010 and other connected cases in Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (Aftab Alam and R.M. Lodha, JJ) 2011 (7) SCALE 513, the question regarding maintainability of Letter Patent Appeal under clause 15 of the Letter Patents of Calcutta High Court (which is ad verbatim clause 15 of the Letters Patent of the High Court at Bombay) was considered. Paragraphs-2, 3 and 4 of the said judgment framed precise points for consideration and the same read thus : 2. The common question that arises for consideration by the Court in this batch of cases is whether an order, though not appealable under section 50 of the Arbitration and Conciliation Act, 1996 (hereinafter "1996 Act"), would nevertheless be subject to appeal under the relevant provision of the Letters Patent of the High Court. In other words even though the Arbit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he granted relief for enforcement of a foreign award, an appeal was preferred before the division bench of the High Court. The appeal was admitted but a preliminary objection was raised in regard to its maintainability in view of section 50 of the 1996 Act. The division bench by order dated May 8, 2007 rejected the preliminary objection holding that the appeal was maintainable. On this background the Supreme Court observed thus in paragraph 31 : 31. In Mohindra Supply Co., a bench of four judges of this Court held that a letters patent appeal against an order passed by a single judge of the High Court on an appeal under section 39(1) of the 1940 Act was barred in terms of sub-section (2) of section 39. This decision is based on the bar against further appeals as contained in sub-section (2) of section 39 of the 1940 Act and, therefore, it may not have a direct bearing on the question presently under consideration. (c) Paragraphs 32 & 33, 34 (part) and 35 briefly record submissions regarding difference in the terminology used in Section 39(1) of the Arbitration Act 1940 and section 37 of the Arbitration and Conciliation Act 1996 vis a vis section 50 of the 1996 act in so....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a information separate from the main context, then, there may be some substance in Mr. Dave's submission that the words in parentheses are surplusage and in essence the provisions of section 39 of the 1940 Act or section 37 of the 1996 Act are the same as section 50 of the 1996 Act. Section 39 of the 1940 Act says no more and no less than what is stipulated in section 50 of the 1996 Act. 43. But there may be a different reason to contend that section 39 of the 1940 Act or its equivalent section 37 of the 1996 Act are fundamentally different from section 50 of the 1996 Act and hence, the decisions rendered under section 39 of the 1940 Act may not have any application to the facts arising under section 50 of the 1996 Act. 52. Once it is seen that Part I and Part II of the Act are quite different in their object and purpose and the respective schemes, it naturally follows that section 37 in Part I (analogous to section 39 of the 1940 Act) is not comparable to section 50 in Part II of the Act. This is not because, as Mr. Sundaram contends section 37 has the words in parentheses "and from no others" which are not to be found in section 50 of the Act. Section 37 and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... devised specially to exclude even the limited ground on which an appeal was earlier provided for under section 6 of the 1961 Act. The exclusion of appeal by section 50 is, thus, to be understood in light of the amendment introduced in the previous law by section 49 of the Act. (e) Ultimately, after examining the entire scheme of the 1996 Act and independently considering the provisions of section 50 of the said Act and the Judgment of the Constitution Bench of the Supreme Court in P.S. Sathappan vs. Andhra Bank Ltd and Ors. (2004) 11 SCC 672 and the Judgment of the Supreme Court in the case of Union of India vs. Mohindra Supply Company 1962(3) SCR 497 the ultimate conclusion reached in paragraph 68 to 73 which read thus: 68. We now come back to the decision of this Court in Mohindra Supply Co. in which the issue was about the maintainability of an appeal, particularly, a letters patent appeal. It is seen above that, in Mohindra Supply Co. the court held that a letters patent appeal was not maintainable in view of section (2) of section 39 of the 1940 Act. To that extent, the decision may not have any bearing on the present controversy. But, in that decision observation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ontained 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 1940, the legislature enacted Act X of 1940, repealing schedule 2 and s. 104(1) clauses (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 the clause in s.104 of the Code of 1908 which preserved the special jurisdiction under any other law was incorporated in s. 39. The section was enacted in a form which was absolute and not subject to any exceptions. It is true that under the Code of 1908, an appeal did lie under the Letters Patent from an order passed by a single Judge of a Chartered High Court in arbitration proceedings even if the order was passed in exercise of appellate jurisdiction, but that was so, because, the power of the Court to hear appeals under a special law for the time being in operation was expressly pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are mentioned in the Act are permissible to be done and acts or things not mentioned therein are not permissible to be done". In other words, a Letters Patent Appeal would be excluded by application of one of the general principles that where the special Act sets out a self-contained code the applicability of the general law procedure would be impliedly excluded. 73. We, thus, arrive at the conclusion regarding the exclusion of a letters patent appeal in two different ways; one, so to say, on a micro basis by examining the scheme devised by sections 49 and 50 of the 1996 Act and the radical change that it brings about in the earlier provision of appeal under section 6 of the 1961 Act and the other on a macro basis by taking into account the nature and character of the 1996 Act as a self-contained and exhaustive code in itself. 75. In the result, Civil Appeal No. 36 of 2010 is allowed and the division bench order dated May 8, 2007, holding that the letters patent appeal is maintainable, is set aside. Appeals arising from SLP (C) No. 31068 of 2009 and SLP (C) No. 4648 of 2010 are dismissed. CONCLUSIONS ON POINT NO. 3 30. In our opinion the aforesaid Judgment ....