Calcutta High Court
Niranjan Lal Todi vs Nandalal Todi And Ors on 1 July, 2015
Equivalent citations: AIR 2015 CALCUTTA 283, (2015) 6 ARBILR 396 (2016) 5 CAL HN 482, (2016) 5 CAL HN 482
Author: Indira Banerjee
Bench: Indira Banerjee
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
A.P.O. No.269 of 2014
A.P.O.T. No.334 of 2014
G.A. No.2427 of 2014
With
A.P. No. 483 of 2010
In the matter of:
Niranjan Lal Todi
Vs.
Nandalal Todi and Ors.
And
A.P.O. No.271 of 2014
A.P.O.T. No.335 of 2014
G.A. No.2426 of 2014
With
A.P. No. 1121 of 2013
In the matter of:
Niranjan Lal Todi
Vs.
Nandalal Todi and Ors.
BEFORE:
The Hon'ble Justice INDIRA BANERJEE
And
The Hon'ble Justice SAHIDULLAH MUNSHI
For the appellant : Mr. Joy Saha, Advocate.
For the respondents : Mr. Samit Talukdar, Senior Advocate.
Heard on :15.06.2015, 29.06.2015, 30.06.2015 Judgment on : 01.07.2015
INDIRA BANERJEE, J. : This appeal is against a judgment and order dated 15th May, 2014 passed by the learned Single Bench dismissing the applications being A.P. No.483 of 2010 and A.P. No.1121 of 2013 for inter alia termination of the mandate of the learned arbitrator, Mr. R.K. Chowdhury, to arbitrate the disputes between the appellant and the respondents.
On or about 31st January, 2004, the appellant and the respondents entered into an agreement whereby and whereunder they agreed to nominate Mr. R.K. Chowdhury, Advocate and Senior Partner of Khaitan and Co., as arbitrator to adjudicate the disputes amongst themselves.
The said agreement dated 31st January, 2004 inter alia provides as follows :-
"The Arbitrator shall make and publish his Award within six months from the date of entering upon the reference under this agreement. The Arbitrator shall have absolute power to extend the said period."
The appellants contend that although the time to make and publish the award in terms of the arbitration agreement had expired on 8th August, 2004, the learned arbitrator neither passed any award, nor extended the time to make and publish the award.
On or about 14th October, 2005, the petitioner filed an application before the learned arbitrator seeking his recusal on the allegation that the learned arbitrator was biased in favour of the respondents, as also de jure and de facto unable to perform the functions of an arbitrator.
On or about 27th January, 2006, the petitioner again filed an application before the learned arbitrator, inter alia questioning his jurisdiction to adjudicate the disputes under the agreement dated 31st January, 2004.
On or about 10th May, 2010, the appellant filed a suit being CS No. 121 of 2010 in this Court, inter alia for partition and distribution of Todi family properties, assets and business. In the said suit being CS No. 121 of 2010, the petitioner filed an interlocutory application being G.A. No. 1596 of 2010.
The respondent No. 1 filed an application being G.A. No. 1756 of 2010, under Section 8 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as the 1996 Act, in the said suit No. CS No. 121 of 2010, praying that the disputes and differences between the parties as enumerated in the plaint filed in the suit being CS No. 121 of 2010 be referred to arbitration in terms of the Arbitration Agreement dated 31st January, 2004.
By an order dated 10th September, 2010, a Single Bench of this Court dismissed the suit being CS No. 121 of 2010, instituted by the appellant, and allowed the application being G.A. No. 1756 of 2010 filed by the respondent No. 1.
The petitioner filed a special leave petition SLP Civil No. 27501-27502 of 2010 in the Hon'ble Supreme Court of India challenging the order dated 10th September, 2010. The said Special Leave Petition was dismissed by the Hon'ble Supreme Court, by an order dated 31st July, 2013, which is set out below:-
"Heard Mr. Guru Krishna Kumar, Learned senior counsel in support of these petitions and Learned counsel appearing for the respondents. We are not inclined to interfere. The special leave petitions are dismissed.
We are informed by Mr. Guru Krishna Kumar that the main arbitrator is not inclined to continue with matter. If that is so, it will be open to the parties to apply to the High Court for appointment of another arbitrator."
After the said special leave petition was dismissed by the order dated 31st July, 2013, the arbitrator, Mr. R.K. Chowdhury wrote a letter dated 14th August, 2013 to the petitioner, denying that he was not inclined to continue with the arbitration. The said arbitrator expressed his desire to continue with the arbitration.
In the meanwhile, on or about 25th August, 2010, the appellant had filed an application in this Court being A.P. No. 483 of 2010 under Sections 14 and 15 of the Arbitration Act, 1996, praying inter alia that the mandate of the arbitrator, Mr. R.K. Chowdhury be terminated.
In or about September 2013 the appellant filed an application being A.P. 1121 of 2013 in this Court, praying inter alia for a declaration that the mandate of the arbitrator, Mr. R.K. Choudhury stands terminated, permanent injunction restraining the arbitrator, Mr. R.K. Choudhury from proceeding with the reference in question, and for appointment of a fit and proper person as arbitrator in place and stead of Mr. R.K. Choudhury to adjudicate the disputes between the parties.
Both the applications being A.P. No.483 of 2010 and A.P. No.1121 of 2013 were heard together and have, by the judgement and order under appeal, been dismissed with costs assessed 10,000 gms (Rs.1,70,000/-) to be paid to the respondent Nos.2 and 3 and the West Bengal State Legal Services Authority in equal measure.
Mr. Samit Talukdar, Senior Advocate appearing on behalf of the respondents, has taken a preliminary objection to the maintainability of the appeal in this Court. The short question in this appeal is, whether an appeal lies to a Division Bench, against an order of the Single Bench, refusing to terminate the mandate of the arbitrator named in the arbitration agreement, and refusing to appoint another arbitrator in place of the named arbitrator.
Mr. Joy Saha, Advocate appearing on behalf the appellant, submitted that the learned arbitrator had not proceeded with the reference fairly. Mr. Saha submitted that the Learned arbitrator was communicating with the respondents behind the back of the appellants. In support of his submission, Mr. Saha referred to correspondence in connection with the arbitration proceedings, from the learned arbitrator to the respondents, to the exclusion of the appellant or his Advocate. No copies of the correspondence were forwarded to the appellant. Mr. Saha further submitted that only a few sittings, 4 or 5 in all, had been held over a span of over nine years, even though the agreed time stipulation for conclusion of the arbitration was six months.
However, before we can go into the merits of the contentions of the respective parties, it is necessary for us to consider the question of whether we, at all, have jurisdiction to entertain this appeal.
Section 37 of the 1996 Act, which provides as follows:
"37. Appealable orders.- (1) An appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order, namely :-
(a) granting or refusing to grant any measure under section 9;
(b) setting aside or refusing to set aside an arbitral award under section 34.
(2) An appeal shall also lie to a Court from an order of the arbitral tribunal -
(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or
(b) granting or refusing to grant an interim measure under section 17.
(3) 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."
Section 37 of the 1996 Act is in pari materia with Section 39 of the Arbitration Act, 1940 which provided as follows:-
"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 Court passing the order:
An order -
(i) superseding an arbitration;
(ii) on an award stated in the form of a special case;
(iii) modifying or correcting an award;
(iv) filing or refusing to file an arbitration agreement;
(v) staying or refusing to stay legal proceedings 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 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]."
Mr. Saha submitted that even though the impugned judgment and order may not be appealable under Section 37 of the 1996 Act, the judgement and order is appealable under Clause 15 of the Letters Patent.
In support of his submission, Mr. Saha cited the judgment of the Supreme Court in Shah Babulal Khimji Vs. Jayaben D. Kania and Ors. reported in AIR 1981 SC 1786 and a judgement of a Division Bench of this Court in Modi Korea Telecommunication Ltd. Vs. Appcon Consultants Pvt. Ltd. reported in 1999 (II) CHN 107.
Clause 15 of the Letters Patent provides as follows:-
"And We do further ordain, that an appeal shall lie to the said High Court of Judicature at Fort William in Bengal from the judgment (not being a judgment passed in the exercise of appellate jurisdiction ...... of one Judge of the said High Court or one Judge of any Division Court ......... and that notwithstanding anything hereinbefore provided an appeal shall lie to the said High Court from a judgment of one Judge of the said High Court...."
In Shah Babulal Khimji Vs. Jayaben D. Kania and Ors. (supra) the Supreme Court held, that in finding out whether the order is a judgment within the meaning of Clause 15 of the Letters Patent, it is to be found out if the order affects the merits of the action between the parties, by determining some right or liability. The nature of the order would have to be examined, in order to ascertain whether there has been a determination of any right or liability. Even an interlocutory order might be a judgment, if it contains the traits and trappings of finality, either when the order decides the questions in controversy in an ancillary proceeding or in the suit itself or in a part of the proceeding. In the case before the Supreme Court, the order of the Trial Judge refusing appointment of a receiver and injunction was held to be judgment within the meaning of Letters Patent.
In Modi Korea Telecommunication Ltd. (supra) the Division Bench was considering the question of whether the learned Single Judge had jurisdiction to entertain an application under Section 11 of the 1996 Act, to determine whether an arbitrator should be appointed in terms of Section 11 and thereafter, if the question was decided in favour of the applicant, to place the matter before the Chief Justice for naming the arbitrator. The Division Bench found that the Single Bench had jurisdiction to decide the question of whether an arbitrator should be appointed.
In Modi Korea Telecommunication Ltd. (supra), the Court clearly held that Letters Patent was subject to the provisions of Section 37(1) of the 1996 Act. However, when the order was not under the provisions of the 1996 Act, the special power and jurisdiction of the High Court under Clause 15 of the Letters Patent to entertain an appeal from any judgement would remain unaffected. Where a question of jurisdiction of the court to entertain or proceed with a suit or proceeding was involved, and a decision on that question was given, such decision was a 'Judgment' within the meaning of Clause 15 of the Letters Patent (Cal.).
In view of the judgement of the Supreme Court in M/s SBP & Co. Vs. M/s. Patel Engineering Ltd. reported in (2009) 10 SCC 293, it is now settled that no appeal would lie to a Division Bench of the High Court against an order under Section 11 of the 1996 Act. The decision would have to be challenged in the Supreme Court.
In M/s. Tanusree Art Printers & Anr. Vs. Rabindra Nath Pal reported in 2000 (2) CHN 213, a Special Bench of Three Judges of this Court approved the judgement of the Division Bench in Modi Korea Telecommunication Ltd. Vs. Appcon Consultants Pvt. Ltd. (supra), to the extent that the Division Bench had held that an appeal would lie from an order purported to have been passed under the Arbitration and Conciliation Act, in the event it was found that the said order had been passed without jurisdiction and not in terms of the provision of the said Act. The Special Bench found that no exception could be taken to the dicta that an order passed without jurisdiction, is no order in the eye of law.
In this case, the order under appeal has been passed in the application of the appellant under Section 14(2) of the 1996 Act for termination of the mandate of the arbitrator to arbitrate the disputes between the appellant and the respondents. The learned Single Bench had the determination to take up the application. It cannot be said that the order under appeal is either without jurisdiction, or not an order under the 1996 Act.
In Union of India Vs. K. Satyanarayan & Co. reported in 1995 (1) CLJ 458 a Special Bench of Three Judges of this Court, clearly held that if an appeal did not lie from an order passed by the Single Judge in terms of Section 39 of the Arbitration Act, 1940, there could be no doubt whatsoever that such an appeal would not be maintainable under Clause 15 of the Letters Patent.
In Union of India Vs. The Mohindra Supply Co. reported in AIR 1962 SC 256 the Supreme Court held:
"There is no warrant for assuming that the reservation clause in S.104 of the Code of 1908 was as contended by counsel for the respondents, "superfluous" or that its "deletion from S.39(1) has not made any substantial difference" : the clause was enacted with a view to do away with the unsettled state of the law and the cleavage of opinion between the Allahabad High Court on the one hand and Calcutta, Bombay and Madras High Courts on the other on the true effect of S. 588 of the Code of Civil Procedure upon the power conferred by the Letters Patent. If the legislature being cognizant of this difference of opinion prior to the Code of 1908 and the unanimity of opinion which resulted after the amendment, chose not to include the reservation clause in the provisions relating to appeals in the Arbitration Act of 1940, the conclusion is inevitable that it was so done with a view to restrict the right of appeal within the strict limits defined by S.39 and to take away the right conferred by other statutes. The Arbitration Act which is a consolidating and amending Act, being substantially in the form of a code relating to arbitration must be construed without any assumption that it was not intended to alter the law relating to appeals. The words of the statute are plain and explicit and they must be given their full effect and must be interpreted in their natural meaning, uninfluenced by any assumptions derived from the previous state of the law and without any assumption that the legislature must have intended to leave the existing law unaltered. 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."
The Arbitration Act 1940 has been repealed and replaced by the 1996 Act. The Supreme Court, as well as the Special Bench of this Court have, on considering the words "an appeal shall lie from the following orders (and from no others) to the Court authorized by law to hear appeals from original decrees of the Court passing the order....." in Section 39(1) of the Arbitration Act, 1940, held that no appeal would lie under the Letters Patent, against an order from which no appeal lay under Section 39 of the said Act. The same words have been retained in Section 37(1) of the 1996 Act.
As held by a Constitutional Bench of the Supreme Court in P. Vajravelu Mudaliar Vs. The Special Deputy Collector for Land Acquisition, West Madras and Anr. reported in AIR 1965 SC 1017, where the legislature uses in an Act, an expression which has received judicial interpretation, it must be assumed that the expression is used in the sense in which it has been judicially interpreted, unless a contrary intention appears.
In Fuerst Day Lawson Limited Vs. Jindal Exports Limited reported in (2011) 8 SCC 333 a Division Bench referred to an relied upon Union of India v. Mohindra Supply Co. (supra) and held:-
"89. It is, thus, to be seen that Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan) was held to be a self-contained code. Now, if the Arbitration Act, 1940 was held to be a self-contained code, on matters pertaining to arbitration, the Arbitration and Conciliation Act, 1996, which consolidates, amends and designs the law relating to arbitration to bring it, as much as possible, in harmony with the UNCITRAL MODEL must be held only to be more so. Once it is held that the Arbitration Act is a self-contained code and exhaustive, then it must also be held, using the lucid expression of Tulzapurkar, J., that it carries with it "a negative import that only such acts as 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 the 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."
In Fuerst Day Lawson Limited Vs. Jindal Exports Limited (supra), the Supreme Court has clearly held that no appeal would lie under Clause 15 of the Letters Patent against an order which is not appealable under Section 37 of the 1996 Act.
This appeal before us is, for the reason discussed, not maintainable in view of the bar of Section 37 of the 1996 Act.
The appeal is, therefore, dismissed.
(INDIRA BANERJEE, J.) (SAHIDULLAH MUNSHI, J.)