Calcutta High Court
Lmj International Ltd. vs Sea Stream Navigation Ltd. on 8 May, 2007
Equivalent citations: AIR2007CAL260, 2008(1)ARBLR83(CAL), (2007)3CALLT424(HC), AIR 2007 CALCUTTA 260, 2008 (1) ALL LJ NOC 42, 2007 A I H C (NOC) 582 (CAL), (2008) 2 ICC 127, 2008 (1) ARBI LR 83, (2008) 1 ARBILR 83, (2007) 4 CAL HN 798, (2007) 3 CALLT 424
Author: Kalyan Jyoti Sengupta
Bench: Kalyan Jyoti Sengupta
JUDGMENT Kalyan Jyoti Sengupta, J.
1. The above appeal has been preferred against a judgment and order dated 17th September, 2003 passed by a learned single Judge in Execution Case No. 28 of 2003 whereby and whereunder the learned Judge has granted reliefs in terms of prayers in column 10 of the Tabular Statement enforcing a foreign award under the provisions of Section 49 of the Arbitration and Conciliation Act, 1996 (hereinafter referred in short as the said Act). This appeal was admitted by a judgment and order dated 19th September, 2003 by the Division Bench of this Court presided over by the Hon'ble Mr. Justice D.K. Seth and the Hon'ble Mr. Justice R.N. Sinha (as their Lordships then were) subject to the question of maintainability and preliminary objection. By this order no formal paper book was asked to be filed dispensing with other formalities and treating the application as informal paper book, however, liberty was granted to include additional papers in the informal supplementary paper book. The judgment and order together with other documents have been included in the informal supplementary paper book subsequently.
2. As usual, learned Counsel, Mr. S.N. Mukherjee, Senior Advocate, appearing for the appellant, has taken up the preliminary point of maintainability. He urges that the order impugned is not an appealable one in view of the specific provision made in Section 50 of the said Act which is set out hereunder:
50. Appealable orders. - (1) An appeal shall lie from the order refusing to-
(a) refer the parties to arbitration under Section 45;
(b) enforce a foreign award under Section 48, to the Court authorized by law to hear appeals from such order. (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. In this case admittedly foreign award has been enforced by way of execution under the provision of Section 48 read with Section 49 of the said Act. From the plain reading of the aforesaid appellate provision (Section 50) it is clear that the nature of the order is such that the same is not appealable. He says that the situation would have been otherwise if the case was a reverse one meaning thereby that the application for execution had been refused.
4. According to him, Clause (15) of the Letters Patent is a law authorizing Court to hear internal appeals in the original side, but the right of appeal being a substantive part must emanate from the statute itself. He further contends, drawing our attention to the statement and object of various parts of the said Act, that it is a self-contained and exhaustive Code by itself and a special statute, when this Act does not provide for right of appeal against an order allowing execution, the appeal cannot be entertained even by invoking Clause 15 of the Letters Patent. In support of his contention he has relied on the following decisions of the Supreme Court and this Court viz. , , 1998 (2) CWN 287, 1995 (1) CLJ 458, 1965 (2) All ER 68 and . He also relied on an unreported decision of the Division Bench of this Court dated 27th January, 1998 in the case of Keventer Agro Ltd. v. Seagram Co. Ltd. A.P.O. No. 499 of 1997 : C.S. No. 592 of 1997.
5. Mr. Sudipta Sarkar, learned Senior Advocate, appearing with Mr. D. Banerjee, learned Senior Advocate for the appellant while opposing the aforesaid preliminary point of maintainability, contends that no doubt the aforesaid Act is a comprehensive and special statute but it provides various parts and chapters to deal with the various problems relating to amongst other arbitration proceedings whether national or foreign. According to him, Part I, Chapter I is a separate part and the same deals with the domestic arbitration right from the appointment of Arbitrator and/or Adjudicator, power of Court to grant interim relief before arid during arbitration proceeding and the method of holding arbitration proceeding and then enforcement of the award and also separate provision for appeal. The award in question is a foreign award admittedly and its enforcement is governed by Part II, Chapter I of the Act. He contends that provision of appeal under Section 50 of the said Act is not exhaustive and the language of the same is markedly different from that of the corresponding provisions contained in Chapter IX of Part I of the said Act. He submits that it will appear from the language of Section 37 particularly Sub-section (1) with the words as bracketed, that the right of appeal is exhaustive and no appeal can be maintained even under any other provision of the law. Therefore, the provision of Section 50 has not made such distinction. According to him, right of appeal provided otherwise under any other statute is not excluded expressly by Section 50 of the said Act. This appeal has been preferred under Clause 15 of the Letters Patent which is a special and original legislation and by virtue of adoption by Constitution it has become the part of the same. He contends further that there are large number of special statutes which are also self-contained Code where right of appeal has been restricted and still then the provision of Clause 15 of the Letters Patent has overridden provision of non-appealability of other statutes.
6. In support of his contention he has relied on the following decisions of the Supreme Court viz. , , . His further contention is that the views taken by the Special Bench of this Court cited by Mr. Mukherjee reported in 1995 (1) CLJ 458 has been, by necessary implication, overruled by subsequent decision of the Supreme Court. The unreported Division Bench judgment of this Court is no longer a good law in view of the subsequent pronouncement of the Supreme Court on the subject, moreover, the learned Judge who delivered unreported decision, in another decision, on this point by necessary implication has taken contrary view.
7. Under such circumstances, the preliminary point raised by the appellant has no merit.
8. After conclusion of hearing on the preliminary point both the parties suggested that this Court should deliver the judgment on this issue first, thereafter it will proceed to decide the matter on merit if warranted. We also feel that the suggestion is reason able. As such, we decide to render the decision.
9. From the contention of both the parties on the preliminary issue it seems to us, the moot question is whether by virtue of provision of Section 50 of the said Act it excludes applicability of the provision of Clause 15 of the Letters Patent as far as right of appeal is concerned against an order allowing execution of foreign award or not. We have already set out portion of Section 50 of the said Act. It is clear that under this Section appeal can be preferred in the event amongst others the executing Court refuses to enforce a foreign award, meaning thereby by necessary implication if there is no refusal there is no right of appeal under the above Section. In an unreported decision rendered in case of Keventer Agro Ltd. v. Seagram Company Ltd. C.S. No. 592 of 1997 (supra) the Division Bench of this Court held that the provision of Section 50 is exhaustive though language mentioned therein is also slightly different from the corresponding provision under Section 37 of the said Act. By virtue of special provision of the Special Act the right of appeal under Clause 15 is excluded. While coming to this conclusion the learned Judge, Hon'ble Justice Mrs. Ruma Pal (as his Lordship then was) as Member of this Bench relied on a large number of decisions of Supreme Court and High Courts rendered upon interpretation of similar provisions of the old Act, 1940. Their Lordships had also taken note of the Special Bench decision of this Court reported in 1995 (1) CLJ 458 in the case of Union of India v. K. Satyanarayan & Co. After the aforesaid Division Bench Judgment this Court ordinarily has either to accept the views expressed by the above Bench or to differ with the same and to send it to larger Bench by reason of the fact that earlier Special Bench decision was rendered under the provisions of the Arbitration Act, 1940 (hereinafter referred to as 1940 Act). But subsequent pronouncement on this issue by the Supreme Court as contended by Mr. Sarkar has seriously engaged our attention to consider whether the judgment rendered in case of Keventer Agro Ltd. is binding factor or not.
10. In the case of Vanita K. Khanolkar v. Pragna M. Pai AIR 1998 SC 424 the scope and effect of provision of Clause 15 of the Letters Patent were examined by the two Judges Bench of the Supreme Court in the context of the provision of Section 6(3) of the Specific Relief Act. In paragraph 3 of the said judgment it was observed that:
Now it is well settled that any statutory provision barring an appeal or revision cannot cut across the constitutional power of a High Court. Even the power flowing from the paramount charter under which the High Court functions would not get excluded unless the statutory enactment concerned expressly excludes appeals under letters patent. No such bar is discernible from Section 6(3) of the Act. It could not be seriously contended by learned Counsel for the respondents that if Clause 15 of the Letters patent is invoked then the order would be appealable. Consequently, in our view, on the clear language of Clause 15 of the Letters Patent which is applicable to Bombay High Court, the said appeal was maintainable as the order under appeal was passed by learned single Judge of the High Court exercising original jurisdiction of the Court. Only on that short ground the appeal is required to be allowed.
11. Subsequently the Division Bench constituting by the same Hon'ble Judges as they were in the case of unreported decision in case of Modi Korea Telecommunications Ltd. v. Appcon Consultants Pvt. (1999) Vol. 2 CHN 107 again examined the effect and scope of Clause 15 of the Letters Patent in the context of the provision of Sections 5, 8, 9, 11, 16, 37(1) of the aforesaid Act. This Division Bench took note of the case of Vanita M. Khanolkar AIR 1998 SC 424 and followed in principle that no statutory pro vision can cut across the constitutional power of the High Court to entertain an appeal under Letters Patent unless the statutory enactment expressly excluded appeals under the Letters Patent. There are no such express words of 'exclusion' in Section 37 of 1996 Act. Therefore the ratio decided by the same Bench in the earlier case that provision of Clause 15 of the Letters Patent is excluded by Section 37(1) of the said Act is completely diluted.
12. In the case of Subal Paul v. Malina Paul three Judges Bench of the Supreme Court in the context of the provisions of Sections 295 and 299 of the Indian Succession Act, 1925 read with Section 104 of the Code of Civil Procedure again considered the scope and provision of the Clause 15 of the Letters Patent. In paragraph 32 of the said judgment it was held as follows:
While determining the question as regards Clause 15 of the Letters Patent, the Court is required to see as to whether the order sought to be appealed against is a judgment within the meaning thereof or not. Once it is held that irrespective of the nature of the order, meaning thereby whether interlocutory or final a judgment has been rendered, Clause 15 of the Letters Patent would be attracted.
13. This Bench of the Supreme Court considering and taking note of earlier decision rendered by the same Court in case of Shah Babulal Khimji (1981) 4 SCC 81 viewed as a statement of law that Clause 15 of the Letters Patent confers right of appeal on a litigant against any judgment passed under any Act unless the same is expressly excluded. Clause 15 may be subject to an Act but when it is not so subject to the special provision the power and jurisdiction under Clause 15 to entertain any appeal from a judgment would be effective.
14. In the case of Sharda Devi v. State of Bihar the three Judges Bench of the Supreme Court considered the effect and scope of Clause 15 of the Letters Patent vis-a-vis Section 54 of the Land Acquisition Act, 1894 in paragraph 9 of this judgment this Bench of Supreme Court in no uncertain terms explained the position of the law as follows : "A Letters Patent is the charter under which the High Court is established. The powers given to a High Court under the Letters Patent are akin to the constitutional powers of a High Court. Thus when a Letters Patent grants to the High Court a power of appeal, against a judgment of a Single Judge, the right to entertain the appeal would not get excluded unless the statutory enactment concerned exclude an appeal, under the Letters Patent."
15. In an old case, Union of India v. Mohindra Supply Co. ; three Judges Bench of the Apex Court examined the scope and purport of Clause 15 of the Letters Patent in the face of the provision of Section 39 of the 1940 Act and Section 4 of the Civil Procedure Code. Scanning the language used in Section 39 the learned Judges in paragraph 16 of the judgment came to conclusion that:
...By Section 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-section (2) and the clause in Section 104 of the Code of 1908 which preserved the special jurisdiction under any other law was not incorporated in Section 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 preserved.
16. In paragraph 19 of the same judgment it was observed amongst others as follows:
...The Arbitration Act which is 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 de liberate departure from the law prevailing before the enactment of Act 10 of 1940 by codifying the law relating to appeals in Section 39.
17. A larger Bench of the Supreme Court in the case of P.S. Sathappan v. Andhra Bank Ltd. the majority of the Bench examined the scope and purport of the letters patent in the context of Section 104 of the Code of Civil Procedure. A large number of decisions of the Supreme Court delivered earlier were considered by this Bench and it was held in paragraph 32 amongst others as follows:
...Merely because there is a provision for amendment does not mean that, in the absence of an amendment or a contrary provision, the Letters Patent is to be ignored. To submit that a Letters Patent is a subordinate piece of legislation is to not under stand the true nature of a Letters Patent. As has been held in Vinita Khanolkar's case (supra) and Sharda Devi's case a Letters Patent is the Charter of the High Court, as held in Shah Babulal Khimji's case (supra) a Letters Patent is the specific law under which a High Court derives its powers. It is not any subordinate piece of legislation. As set out in aforementioned two cases a Letters Patent cannot be excluded by implication. Further it is settled law that between a special law and a general law the special law will always prevail. A Letters Patent is a special law for the concerned High Court. Civil Procedure Code is a general law applicable to all Courts. 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 when 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 100-A.
18. Of course in paragraph 34 of the same judgment their Lordships expressed the statement of law to the effect as follows:
...An appeal is a creature of a statute. If a statute permits an appeal, it will lie. If a statute does not permit an appeal, it will not lie. Thus for example in cases under the Land Acquisition Act, Guardians and Wards Act and the Succession Act a further appeal is permitted whilst under the Arbitration Act a further appeal is barred. Thus different statutes have differing provisions in respect of appeals. There is nothing anomalous in that.
19. Two-Judges Bench of the Supreme Court in case of Upadhyaya Hargovind Devshanker v. Dhirendrasinh Virbhadrasinhji Solanki considered the applicability of provision of Clause 15 of the Letters Patent in connection with the provision of Section 116 of the Representation of the People Act. This judgment of Supreme Court while overruling the judgments and ILR (1970) 2 Mad 183 held that the appellate provision of the aforesaid Act will override the provisions of Clause 15 of the Letters Patent. This judgment observed that the Representation of the People Act is a self-contained and complete Code so no provisions of any other law can be brought for assistance to prefer appeal.
20. The Division Bench of this Court in case of Sureka Steel Limited v. Union of India 1998 CWN 287 held that the provision of Section 37(1) of the Arbitration Act, 1940 overrides the provision of Clause 15 of the Letters Patent. The Division Bench in this case noted that provision of operations of Clause 15 of the Letters Patent is subject to other provisions of the special law. It was-held that right of appeal under the old Arbitration Act is exclusively provided in Section 37 and no other provision of any law can be brought for assistance when the special statute does not provide so. This judgment also observed, that the Arbitration Act, 1940 was self-contained Code itself.
21. Thus upon discussion of the aforesaid decisions as quoted above we are of the opinion that the Letters Patent Act is not a mere enactment made by the Parliament and it is an instrument to constitute this Court before commencement of the Constitution, and it has become the part and parcel of the Constitution by virtue of Article 225 and Article 372 of the Constitution of India. But in view of inbuilt saving provisions as mentioned in Clause 44 of the Letters Patent applicability of any provision of Letters Patent can be taken away and/or altered by an appropriate legislation. Clause 44 of the Letters Patent is set out hereunder:
44. Powers of Indian Legislature preserved. And we do further ordain and declare, that all the provisions of these our Letters Patent are subject to the legislative powers of the Governor-General in Legislative Council and also of the Governor-General in Council under Section 71 of the Government of India Act, 1915, and also of the Governor-General in cases of emergency under Section 72 of that Act, and may be in all respects amended and altered thereby.
22. In this context we will be failing to discharge our duties unless we refer to de cision of a Full Bench of Madras High Court in the case of Moolchand v. Kissindoss . This Bench in paragraph 5 with extreme clarity and lucidly, with respect very usefully discussed as follows:
Having regard to this pronounced conflict of judicial opinion, we would discuss the question as if it were res Integra. The order under appeal is a judgment within the meaning of Clause 15 of the Letters Patent and, therefore, prima facie, this appeal is competent under this clause. The contention that the appeal is incompetent is ultimately founded on Clause 44 of the Letters Patent, read of course, with Sub-section (2) of Section 39. Clause 44 is in general terms and is of an omnibus nature. It does not specifically refer to any right of appeal conferred by any of the clauses of the Letters Patent. It declares that the provisions of the Letters Patent are subject to the legislative powers of the Governor General in Legislative Council and the Governor General in Council under Section 71 of the Government of India Act, 1915 and of the Governor General in cases of emergency under Section 72 of that Act.
What can be done in the exercise of such legislative power is also mentioned in Clause 44 itself namely, that all the provisions of the Letters Patent may in all respects be amended and altered. Clause 15 is one of the provisions of the Letters Patent and it must be conceded that this Clause may in all respects be amended and altered in exercise of the legislative powers of the Governor General in Council. It is not pretended that Clause 15 has been expressly amended and altered so as to take away the right of appeal conferred by it in certain cases arising under the Indian Arbitration Act. All that is contended is that, by necessary intendment, the clause should be deemed to have been amended and altered by Section 39(2) of the Arbitration Act, which is no doubt an Act passed by the Governor General in Legislative Council.
Before we can hold that such an important provision as Clause 15 of the Letters Patent has been amended and altered by necessary implication, we should be satisfied beyond doubt that the implication is so compelling that to hold otherwise would be practically rendering a provision of an Act of the Central Legislature useless and inoperative....
23. After discussing and examining the provision of Section 39, of Act, 1940, Section 100 of C.P.C. and Clause 15 of the Letters Patent their Lordships opined in paragraph 11 finally as follows:
On a consideration of all aspects of the question, we have arrived at the conclusion that the expression "second appeal" in Section 39(2) of the Arbitration Act, would not apply to an appeal under Clause 15 of the Letters Patent from one-Judge of the High Court to two or more Judges of the same Court. We are therefore of opinion that there is nothing in Section 39(2) of the Arbitration Act which compels us to hold that Clause 15 of the Letters Patent has amended and altered thereby and the right of appeal conferred by that clause restricted in any way....
24. It is worth noticing that the above Full Bench decision in spite of expressly mentioning by the Legislature for not allowing second appeal, did not consider even by necessary implication far less expressly, that provision of Clause 15 has been taken away or altered by virtue of Clause 44 of Letters Patent.
25. So long it is not done the provision of Letters Patent will have to be applied. Sequally provision of Clause 15 thereof will remain in operation. According to us, as observed by the Supreme Court unless a special legislation clearly and expressly abridges and takes away the provision of appeal under Clause 15 the litigant's right thereunder remain unaffected whether or not special Act provides for such right either expressly or otherwise, of course the same satisfies the test of judgment under Clause 15. In a fairly recent decision of a Division Bench of this Court reported in 2006 (3) CHN 743 : 2006 Cri LJ 4109 Subir Kumar Ghosh v. Prasar Bharati Broadcasting Corporation of India, similar view was taken as we have taken, while examining provision of Section 340 of Criminal Procedure Code vis-a-vis provision of Clause 15 of the Letters Patent.
26. We have already quoted the provision of Section 50 of 1996 Act and by this section we are of the view, the provision of Clause 15 has not been affected and/or taken away albeit Sub-section (2) thereof does not provide for second appeal. We have already noted Full Bench decision of Madras High Court and it appears therein upon reading language of Section 39(2) of 1940 Act which is identical with those mentioned in the Section 50 of 1996 Act by the Legislature, the above Bench held that provision of Clause 15 remains untouched. Accordingly we opine that the Section 50 does not affect or alter Clause 15 in any manner.
27. This right cannot be taken away inferentially. In order to alter or affect the provision of Clause 15 or for that matter any part of the Letters Patent there must be expressed statutory provision; for example Section 21 of the City Civil and Section 16 of City Session Court Act, 1953 (Calcutta) have expressly taken away.
City Civil Court Act (21 of 1953):
21. Act to override other law including Letters Patent. - The provisions of this Act shall have effect notwithstanding anything to the contrary in any other law, including in particular the Letters Patent of the High Court.
City Sessions Court Act (20 of 1953)
16. Act to override other law including Letters Patent. - The provisions of this Act shall have effect notwithstanding anything to the contrary in any other law, including in particular the Letters Patent of the High Court.
Provided that nothing in this Act shall be deemed to affect any provisions of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949 or the Tribunals of Criminal Jurisdiction Act, 1952:
Provided further that nothing in this Act shall be deemed to confer any jurisdiction on the City Sessions Court to try any offence under the Indian Companies Act, 1913 or deemed to affect the jurisdiction of the High Court under the Banking Companies Act, 1949.
28. The Arbitration and Conciliation Act, 1996, is no doubt a consolidated Act but it contains several parts. According to us Part I deals with the domestic arbitration proceedings and various provision have been made in this Act aiming at to deal with all and every possible situations. So this part is no doubt a complete Code. Unlike Part I provision of Part II is not complete Code. This part deals with the method and procedure for enforcement of foreign awards and provision of appeal and this provision do not provide any machinery to deal with any situation which might arise. Unlike Part I this part no where says what would be the period of limitation for enforcement of the foreign award and there is no period of limitation fixed within which the appeal has to be preferred and this part does not say specifically by which Court the foreign award has to be enforced, for definition of "Court" in Section 2(e) of the Act, contained in Part I is not applicable. Obviously before the Court competent to execute as if it were a decree passed by the same Court or the Court to which it is sent for execution. We are therefore of the view that because of compartmentalization of this Act this portion cannot be said to be a complete code. As such, the provisions of appropriate laws namely general law or procedural law has to be applied by the Court.
29. In view of the decision and observation taken by the Supreme Court as quoted above we think that ratio decidendi in the case of Keventer Agro Ltd. (supra) is no longer a good law and it is deemed to have been overruled.
30. We are thus unable to accept the contention of Mr. Mukherjee that the (sic) Arbitration and Conciliation Act is a self-contained Code and provision of Clause 15 is excluded and overriden by Section 50 of the said Act. We therefore, hold that provision of Clause 15 of the Letters Patent is still available for preferring appeal irrespective of provision of Section 50 of the said Act provided of course having regard to the nature of the matter, it is a judgment within the meaning of Clause 15 of the Letters Patent.
31. I agree.