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Union of ors. Vs. N.K. Pvt. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberFirst Appeal No. 7 of 1971
Judge
Reported inAIR1972Delhi202; ILR1972Delhi122
ActsArbitration Act, 1940 - Sections 41; Code of Civil Procedure (CPC), 1908 - Sections 39
AppellantUnion of India and ors.
RespondentN.K. Pvt. Ltd. and anr.
Advocates: Niren De,; A.B. Saharia,; G.L. Sanghvi,;
Cases ReferredIn Jalasutram Annapumamma v. Jalasutram Rarnkrishna Sastry
Excerpt:
.....arbitration proceeding--whether appealable only under section 39 or also under order xliii code of civil procedure.; that an order passed in or for the purpose of or in relation to an arbitration proceedings is an order passed under the arbitration act. section 41(a) and section 41(b) read with the second schedule of the arbitration act, incorporate the provisions of the code of civil procedure into the arbitration act to apply them to arbitration proceedings. but orders passed in arbitration proceedings are, for that reason, not passed under the code of civil procedure. they are not, thereforee, appealable under order xliii rule 1 civil procedure code also extends only the 'procedure', as distinguished from provisions relating to right of appeal contained in the code, to arbitration..........provision of law which gives the union of india the right of appeal. section 4(1) of the code of civil procedure enacts that 'in the absence of any specific provision to the contrary, nothing in this code shall be deemed to limit or otherwise affect any special or local law'. provisions of the letters patent of the high courts have been held to be such 'special law'. for instance, clause 36 of the letters patent of the high court of bombay was held to be applicable in preferences to section 98 of the code to govern an appeal from the original side of the high court to a third judge where two judges had differed. (bhahidas v. pai gulab 1921) 481. a. 1810. under sub-section (1) of .section 10 of the delhi high court act, 'where a single judge of the high court of delhi exercises ordinary.....
Judgment:

V.S. Deshpande, J.

(1) After the dis

(2) The right of appeal is a substantive one and has to be given by some statute expressly or by necessary implication. We have to find out, thereforee, the particular provision of law which gives the Union of India the right of appeal. Section 4(1) of the Code of Civil Procedure enacts that 'in the absence of any specific provision to the contrary, nothing in this Code shall be deemed to limit or otherwise affect any special or local law'. Provisions of the Letters Patent of the High Courts have been held to be such 'special law'. For instance, clause 36 of the Letters Patent of the High Court of Bombay was held to be applicable in preferences to section 98 of the Code to govern an appeal from the original side of the High Court to a third Judge where two Judges had differed. (Bhahidas v. Pai Gulab 1921) 481. A. 1810. Under sub-section (1) of .section 10 of the Delhi High Court Act, 'where a single Judge of the High Court of Delhi exercises ordinary original civil jurisdiction conferred by sub-section (2) of section 5 on that Court (i.e., in every suit the value of which exceeds Rs. 50,000.00) an appeal shall lie from the judgment of the single Judge to a Division Bench of that Court'. Section 10(1) reproduces the relevant provision of the Letters Patent of those High Courts who have ordinary original civil jurisdiction. Section 104(1) of the Code of Civil Procedure providing for appeals from orders also saves provision of 'any law for the time being in force' relating to such appeals. As observed by the Supreme Court in Union of India v. The Mohindra Supply Company : [1962]3SCR497 , 'Under the Code, as amended, the view has consistently been taken that interlocutory judgment passed by single judge of Chartered High Courts were appealable under the Letters Patent'. The order appealed a'gainst would, thereforee, have been appealable under section 10(1) of the Delhi High Court Act, 1966 unless such appeal is barred by section 39 of the Arbitration Act which reads as follows :-

'39,(1)An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the orders :-

ANorder:- (i) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii) modifying or correcting an award; (iv) filling or refusing to file an arbitration agreement; (v) staying or refusing to stay legal proceeding where there is an arbitration agreement; (vi) setting aside or refusing to set aside an award; Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court.

(2)No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.'

(3) Section 39 regulates appeals from 'orders passed under this Act'. We have to first inquire, thereforee, whether the order appealed against was passed under the Act, The meaning of the expression 'under the. Act' is obvious. It is only an order which is passed in exercise of the power conferred by some provision of the Act or in accordance with some provision of Act or in compliance thereto can be called an order passed under that Act. What is the provision of law under which this particular order was passed The application on which the order was passed purported to be under Order Xxxix rule 4 read with section 151 of the Code of Civil Procedure. But this only shows that the Union of India purported to seek the order under these provisions of the Civil Procedure Code. This does not mean that the order must be taken to be passed under those provisions. To be regarded as an order 'under the Civil Procedure Code' these provisions Of the Code must be applicable proprio vigore to the proceedings in which the order was passed. The proceeding was initiated by an application under section 20 of the Act. It was pending in the sense that the order of reference to arbitration was challenged in an appeal before a Division Bench of this Court and the order in question was passed during the pendency of the appeal. In support of the appeal, learned Attorney General for the Union of India relied upon the provisions of section 41 of the Act which is as below :- '41. Subject to the provisions of this Act and of rules made there under.- (a) the provisions of the Code of Civil Procedure, 1908. shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court : Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any such matters.' There was a proceeding before the Court within the meaning of section 41(a) when this order was passed. Section 141 of the Code of Civil Procedure applies the procedure provided in the Code of proceeding in any Court of Civil jurisdiction. Section 41(a) of the Act applies the provision of the Code of Civil Procedure to proceedings before the Court and to appeals 'under this Act'. While the proceeding under section 20 of the Act was a proceeding in a court of civil jurisdiction within the meaning of section 141 Civil Procedure Code it was nevertheless a proceeding 'under this Act', namely, the Arbitration Act, within the meaning of section 41(a) of the Act. When, thereforee, a provision of civil Procedure Code applies to a proceeding before the Court 'under the Arbitration Act' (as was held for instance, in Munshi Ram v. Banwari Lal, (1962) Supp. 2 Scr 477, in relation to Order Xxiii rule 3 Civil Procedure Code) an order passed in such a proceeding would be an order passed in a proceeding which is before the Court 'under the Act' and, thereforee, the order itself would be 'under the Act'. Section 141 Civil Procedure Code applies only 'the procedure' under the Code to other proceedings in a court of civil jurisdiction. The right of appeal and other substantive rights and powers dealt with by the Civil Procedure Code are not regarded as mere procedure and are 'not, thereforee, made applicable by section 141. Bhagwanti v. New Bank of India Ltd. Air 1950 East Punjab 111 (FB) at 118, Venkata Reddi v. Ventrapragada Ramabrahman, : AIR1953Mad417 ,() and Perivakaraupa Thevar v. Vellai alias Ocha Thevar, : AIR1963Mad338 . Section 41(a) of the Arbitration Act, on the other hand, applies all the 'provisions of the Code of Civil Procedure' to proceedings under the Act. Even it is assumed that the provisions of Order XLiii rule 1(r) of the Civil Procedure Code giving a right of appeal against an order passed under Order Xxxix rule 4 Civil Procedure Code are thereby made applicable to the order under appeal, section 41(a) of the Act is itself subject to section 39 of the Act. Before considering the effect of section 39, we may complete our examination of section 41 of the Act.

(4) Section 41(b) confers on the Court ' for the purpose of and in relation to any proceedings before the Court' the same power of making orders in respect of any of the matters set out in the Second Schedule. One of the matters set out in the Second Schedule is 'Interim injunctions'. The title 'Interim injunctions' is like an Entry in a List in the Seventh Schedule of the Constitution. It only indicates the field of operation. It is not exhaustive as a description of the subject-matter of power. The title 'Interim mjunctions'' must, thereforee, include not only the grant of interim injunctions but also the cancellation or variation thereof. Its scope is, thereforee, co-terminus with the scope of not only rule 2 but also of rule 4 of Order Xxxix Civil Procedure Code. Section 41(b) is wider than section 41(a). It applies even though there may be no proceeding before the Court provided that the order is made for the purpose of and in relation to any arbitration proceeding. It specifically gives the power to make orders regarding interim injunctions. This special provision would prevail against the general provisions of section 41(a) in respect of interim injunctions. The order under appeal is, thereforee, better understood as an order passed by virtue of section 41(b) rather than of section 41(a) of the Act.

(5) Learned Attorney General contended that the order under appeal is passed under the Code of Civil Procedure and not under the Act because the provisions of Order XLiii rule 1 Civil Procedure Code and not those of the Arbitration Act enabled the filling of this appeal. This argument is. however, unacceptable for several reasons. Firstly, section 141 Civil Procedure Code does not apply Order XLiii rule 1 (r) to the proceedings under the Act. It cannot be said, thereforee, that an order varying a temporary injunction could be appealed against solely under the Code of Civil Procedure and independently of the Act. Secondly, the only possible provision which could empower the Court in a proceeding under the Act' or for the purpose of and in relation to an arbitration proceeding to vary a previous order of temporary injunction is either Section 41(a) or section 41(b) read with the Second Schedule of the Act. The references to the relevant provisions of the Code of Civil Procedure is section 41(a) of the Act incorporate those provisions in the Arbitration Act, they become applicable to proceedings before the Court firstly because the proceeding itself is 'under this Act' as expressly stated by section 41(a). Secondly, the said provisions become applicable by virtue of the Act and not by virtue of the Code of Civil Procedure. Even if the Civil Procedure Code of 1908 is repealed, still its provisions incorporated in section 41(a) of th& Act shall continue to apply to the proceedings before the Court under the Act. On the other hand, if section 41 is itself repealed, then the very basis for the application of the provisions of the Civil Procedure Code would disappear and they would become inapplicable except under section 141 Civil Procedure Code. Judged by this test, the order must be regarded as having been passed in exercise of the power conferred by section 41(a) and not in exercise of the power conferred by the Code of Civil Procedure.

(6) Section 41(b) does not refer to the Code of Civil Procedure but refers to 'the same power.........as the Court has for the purpose of, and in relation to, any proceedings before the Court'. These powers include the powers conferred by the Code of Civil Procedure and, thereforee, the power of varying a temporary injunction specially. This provision also, thereforee, incorporates those powers in the Arbitration Act. The order varying the temporary injunction, thereforee, was passed under section 41(b) and not under the code of Civil Procedure for the same reasons given in considering section 41(a) above.

(7) The Legislature has applied the provisions of the Code of Civil Procedure to proceedings under different Acts. This result has, however, come about because of the express provisions contained in those Acts rather than by virtue of section 141 of the Code. For, section 141 makes the procedure of the Code applicable only 'as far as it can be made applicable'. Section 141 would not, thereforee, prevail against a contrary provision of the particular Act concerned.

(8) Section 39 of the Act was held to be such a contrary provision in Union of India v. Mohindra Supply Company. It also prevails over section 41 of the Act because section 41 itself opens with the worlds 'subject to the provisions of this Act', section 39 being such a provision to which section 41 is subject.

(9) In Shri Krishen v. Radha Kishen : AIR1952All652 , relying upon an earlier Full Bench decision of that Court, a view was expressed that the operation of section 39 of the Act was confined only to orders which were made under some express provision of the Act and did not extend to those orders which are made under the provisions of the Code of Civil Procedure which in a sense are incorporated in the Arbitration Act by section 41 of the said Act. The distinction made between the provisions of the Act and the provision of the Code of Civil Procedure by the Allahabad High Court fails to consider the real source of authority conferred on the Court for the application of the provisions of the Code of Civil Procedure. They are not applicable by their own force. They are made applicable only by section 41 of the Act. The test of incorporation was rejected by the learned Judges without sufficient reason. In our view, that test is decisive. For. even if the Code of Civil Procedure, 1908, were to be repealed the Courts would still be authorised to apply the provisions of that Code and this could be done only because of the authority conferred on the Court by section 41 of the Act. If, on the other hand, section 41 of the Act were to be repealed, the provisions relating to appeals under Order XLiii would not be applicable by virtue of section 141 Civil Procedure Code which is restricted only to procedure. We are, thereforee, still of the view that the order under appeal is passed under the Arbitration Act and not under the Code of Civil Procedure. We find ourselves in agreement in this respect with the view of a Division Bench of the A Calcutta High Court in Rebati Ranjan Chakravarti v. Suranjan Chakravarti : AIR1963Cal642 .

(10) Section 38(1) of the Delhi Rent Control Act, 1958 gives a right of appeal against 'every order of the Controller ' made under this Act'. Under section 37(2) of the said Act, the Controller has to follow, as far as may be, the practice and procedure of a Court of Small Causes. The same distinction between orders passed under the express provisions of the Delhi Rent Control Act, 1958 and under the provisions of the Code of Civil Procedure made applicable by section 37(2) thereof could also have been made on the lines of the reasoning of the Allahabad decision referred to above. But this was not how the Supreme Court viewed the matter. In Central Bank of India Ltd. v. Gokal Chand, 1967 Delhi Law Times l,() in paragraph 3 of the decision, their Lordships, on the other hand, construed the words ''every order of the Controller made under this Act' to signify only those orders which affect the rights or liabilities of the parties so that the right of appeal is restricted only to such. orders and is not extended to merely procedural orders which are only steps taken towards the final adjudication. It is clear that many orders which could be described as passed under the provision of the Civil Procedure Code and not under any express provision of the Delhi Rent Control Act, 1958 could be appealed against as affecting the rights or liabilities of the parties. But the appeal could be filed only under section 38 of the said Act and not under any provision of the Code of Civil Procedure.

(11) Under section 24 Hindu Marriage Act, 1955 an order for maintenance pendente lite can be passed by the Court 'in any proceeding under this Act'. In Jalasutram Annapumamma v. Jalasutram Rarnkrishna Sastry : AIR1959AP49 , it was contended that the word 'proceeding' in section 24 must be confined to the original proceeding on the ground that the original proceeding is the one under the Hindu Marriage Act, 1955 whereas an appeal against the order in that proceeding is a proceeding under the Civil Procedure Code inasmuch as under section 28 of the said Act orders made in any proceeding under the Act 'may be appealed from under any law for the time being in force'. Repelling this contention, Subba Rao C.J. speaking for the division Bench observed as follows-

'IT is true that section 28 confers a right of appeal by reference to any law. But nonetheless, but for section 28, the aggrieved party cannot have a right of appeal against an order of dissolution of marriage or other orders under the Act. The right of appeal is one conferred under the Act and, thereforee, it is a proceeding under the Act............ The fact that an appeal lies under the Civil Procedure Code against an order in a proceeding under the Act, will not make the appeal any-the-less a proceeding under the Act, for, the appeal also relates to the adjudication in respect of the rights conferred under the Act'.

(12) Our conclusions are, thereforee, as follows :- (1) The order varying temporary injunction passed by the learned Single Judge was prima focie a 'judgment' within the meaning of section 10 of the Delhi High Court Act, 1966, and an appeal would ordinarily have been competent there under to a Division Bench of this Court. (2) This right of appeal under the general law was, however, subject to the special law namely, section 39 of the Arbitration Act, which has an appeal from such an order altogether. (3) No right of appeal against the said order was available under the 'procedure' contained in the Code of Civil Procedure made applicable by section 141 of the said Code. (4) The order under appeal was passed under section 41 of the Arbitration Act and was thus governed by section 39 of the said Act. It was not passed outside the Act and under the Code of Civil Procedure alone. (5) An order under the Arbitration Act passed by a court subordinate to the High Court would be amenable to revision under the section 115 of the Code of Civil Procedure if it is not appealable under section 39 of the Arbitration Act. But an order passed by a learned Single Judge of this Court under the Arbitration Act is either appealable under section 39 of the said Act or is not appealable at all. The question of revision does not arise.

(13) In view of the above conclusions, we find that the present appeals, namely, F.A.O.(OS) 7 and 8 of 1971, are not maintainable. They are, thereforee, dismissed on this preliminary ground alone which precludes us from going into the merits of the appeals. In the circumstances we make no order as to costs. As the appeals themselves are not maintainable C.M. Nos. 1447 and 1448 of 1971 are dismissed.


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