Indian Kanoon - Search engine for Indian Law

Delhi High Court - Orders

National Highways Authority Of India vs M/S. Patel Knr Heavy Infrastructure ... on 14 December, 2021

Author: Vipin Sanghi

Bench: Vipin Sanghi, Jasmeet Singh

                          $~22
                          *      IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +      FAO (OS) (COMM) 169/2021 & CM APPLs. 44998/2021,
                                 44999/2021, 45000/2021
                                 NATIONAL HIGHWAYS AUTHORITY OF INDIA ..... Appellant
                                                  Through: Mr. S Nandakumar, Ms. Deepika
                                                           Nandakumar and Mr. Anand Murthi
                                                           Rao, Advs.
                                                  versus

                                 M/S. PATEL KNR HEAVY
                                 INFRASTRUCTURE PVT. LTD.                   ..... Respondent
                                               Through: Dr. Amit George with Mr. Swaroop
                                                        George, Mr. Amol Acharya, Mr.
                                                        Rayadurgam Bharat & Mr. Piyo
                                                        Harold Jaimon, Advs.

                                 CORAM:
                                 HON'BLE MR. JUSTICE VIPIN SANGHI
                                 HON'BLE MR. JUSTICE JASMEET SINGH
                                              ORDER

% 14.12.2021

1. The present appeal is directed against the order dated 22.11.2019 passed by learned Single Judge in I.A. No. 14271/2019 in OMP (COMM) 268/2019. The said Original Miscellaneous Petition (COMM) 268/2019 has been preferred by the appellant under Section 34 of the Arbitration and Conciliation Act to assail the arbitral award dated 11.02.2019, which allowed Nos. 2,3,4,5,8 and 9 the claim of the respondent/claimant.

2. The impugned order rejects the appellant's application for modification of the earlier order dated 24.07.2019. By the order dated 24.07.2019, the learned Single Judge did not grant unconditional stay of the Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 1 of 9 Signing Date:17.12.2021 18:14:26 operation of the award on claim Nos. 2, 4, 5, 8 & 9. By the present application, the Appellant/ Petitioner again sought that the operation of impugned award qua claim Nos.2,4,5, 8 & 9 be stayed, without the pre- condition of deposit of the awarded money stipulated therein. The learned Single Judge found no good reason to modify the earlier order dated 24.07.2019.

3. The earlier order dated 24.07.2019 has not been assailed in the present appeal and the same has been filed as a part of the application moved by the appellant/petitioner being I.A. No. 14271/2019 to seek review of the order dated 24.07.2019. By the said order, the learned Single Judge held that so far as claim No. 3 is concerned, the challenge laid by the appellant/petitioner to the award on the said claim was untenable, and the objection itself was rejected. Direction was issued to the appellant/petitioner to release the sum awarded, along with up-to-date interest in so far as the claim No. 3 is concerned. In relation to the other claims awarded in favour of the respondent herein, the Court directed the appellant/petitioner to deposit the awarded amounts with up-to-date interest, subject whereto the operation of the impugned award was stayed. The deposit was required to be made within five weeks. The said order in I.A. No. 9478/2019 preferred by the appellant/petitioner, to seek the stay of the impugned award was disposed of.

4. In the aforesaid context, learned counsel for the respondent, who appears on advance notice, has raised two preliminary objections with regard to maintainability of the present appeal. He, firstly, submits that the present appeal is not maintainable under Section 37 of the Arbitration & Conciliation Act, in as much as the order under challenge, does not fall in any of the categories as enumerated in Section 37(1) or 37(2) of the Act. Dr. Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 2 of 9 Signing Date:17.12.2021 18:14:26 George has submitted that the order under challenge is one relatable to Section 36(3) of the Act. He further submits that the appellant has only assailed the order whereby the application for modification/review was rejected, and the original order dated 24.07.2019 has not been assailed and such an appeal is, even otherwise, not maintainable.

5. In support of his first submission, he has sought to place reliance on the decision of the Division Bench of this Court in South Delhi Municipal Corporation v. Tech Mahindra, 2019 SCC Online DEL 11863. On the second aspect aforesaid, he has placed reliance on Basant Kharbanda v. Punjab & Sind Bank, (1997) 40 DRJ 145 DB (para 4, 5 & 6).

6. On the other hand, the submission of learned counsel for the appellant, to support the maintainability of the appeal, is that the impugned order dated 22.11.2019, as also the original order dated 24.07.2019, are relatable to Section 9 (1) (e) of the Act which empowers the Court to "pass such other interim measure of protection as may appear to the Court to be just and convenient". He submits that an order passed under Section 9 of the Act is specifically appealable under Section 37(1) (b), which makes an order "granting or refusing to grant any measure under Section 9" of the Act appealable. In support of his plea, he has sought to place reliance upon the judgement of the Division Bench of this Court in FAO (OS) (COMM) 21/2021 Future Retail Limited v. Amazon.com NV Investment Holdings LLC & Ors. decided on 08.02.2021, and particularly on para 9 thereof.

7. In response to the aforesaid submissions of Mr. Nandakumar, Dr. George has firstly drawn our attention to BGS SGS SOMA JV v. NHPC Limited (2020) 4 SCC 234 to submit that the decision of this Court in South Delhi Municipal Corporation v. Tech Mahindra (supra) was Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 3 of 9 Signing Date:17.12.2021 18:14:26 approved by the Supreme Court. He also submits that the decision of the Division Bench of this Court in Future Retail Ltd. (supra) was set aside by the Supreme Court in Amazon.com NV Investment Holdings LLC & Ors. v. Future Retail Limited 2021 SCC Online SC 557, while holding that no appeal lies under Section 37 of the Arbitration & Conciliation Act against an order of enforcement of an emergency arbitrator's order made under Section 17 (2) of the Act. The impugned judgement of the Division Bench dated 08.02.2021 and 22.03.2021 were set aside.

8. Having heard learned counsels and perused the record, as well as the decisions relied upon by both of them, we are of the view that the present appeal is not maintainable. As we have noticed hereinabove, the order dated 24.07.2019 of which modification/review was sought, was squarely one under Section 36 (3) of the Act. In fact, the appellant/petitioner had moved an application for stay of the award under challenge, under Section 36(3) of the Act. Therefore, the submission of learned counsel for the appellant/petitioner that the order dated 24.07.2019, as well as the impugned order were passed under Section 9 of the Act is completely misconceived.

9. We may observe that Section 9 (1) (e) contains the residuary powers of the Court to pass such other interim measures of protection as may appear to the Court to be just and convenient at the pre-arbitration stage, or during arbitration, or at the post arbitration stages. On the other hand, Sections 36 (2) and 36(3) specifically deal with a situation where an arbitral award has been rendered, and the aggrieved party/objector desires to seek stay of the operation of the award during the pendency of the objection proceedings, to ward off execution of the Award during its challenge. Since, there is a specific provision dealing with the aspect of grant of interim stay of the Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 4 of 9 Signing Date:17.12.2021 18:14:26 operation of the award which is under challenge, contained in Sections 36 (2) and 36 (3) of the Act, in our view, no reliance can be placed on the residuary power of the Court to grant interim measures under Section 9 (1)

(e) of the Act. An order passed under Section 36 (3) of the Act has not been made specifically appealable under Section 37 and, therefore, in our view, there is merit in the submission of Dr. George that the present appeal is not maintainable under Section 37 of the Act. This position has been specifically noted in South Delhi Municipal Corporation (supra) by the Division Bench of this Court. We may notice the following extracts from the South Delhi Municipal Corporation (supra):

"9. It is quite evident that the legislative or Parliamentary intent, was to confer upon the Commercial Appellate Courts and Commercial appellate Division Bench of a High Court, extremely limited jurisdiction and circumscribe the appellate jurisdiction. Thus, in interlocutory matters, as it were, Commercial Appellate Division possesses jurisdiction in matters enumerated in the Order XLIII Rule 1 - no less no more. Likewise, with respect to the appeals against orders made in the course of proceedings under the Arbitration Act, the Court's power is delineated to what is enumerated in Section 37 of CPC.

10. In Kandla Export Corporation (supra), the Court held as follows:

"14. Section 13(1) of the Commercial Courts Act, with which we are immediately concerned in these appeals, is in two parts. The main provision is, as has been correctly submitted by Shri Giri, a provision which provides for appeals from judgments, orders and decrees of the Commercial Division of the High Court. To this main provision, an exception is carved out by the proviso. The primary purpose of a proviso is to qualify the generality of the main part by providing an exception, which has been set out with great felicity in CIT v. Indo Mercantile Bank Ltd., 1959 Supp (2) SCR 256 at 266-267, thus:

******** *********

15. The proviso goes on to state that an appeal shall lie from such orders passed by the Commercial Division of the High Court that are specifically enumerated under Order XLIII of the Code of Civil Procedure Code, 1908, and Section 37 Section 37 of the Arbitration Act. It will at once be noticed that orders that are not specifically enumerated under Order XLIII of the CPC would, therefore, not be appealable, and appeals that are mentioned in Section 37 of the Arbitration Act alone are appeals that can be made to the Commercial Appellate Division of a High Court.

16. Thus, an order which refers parties to arbitration under Section 8, not being appealable under Section 37(1)(a), would not be appealable under Section 13(1) of the Commercial Courts Act. Similarly, an appeal rejecting a plea referred to in sub- sections (2) and (3) of Section 16 of the Arbitration Act would equally not be appealable under Section 37(2)(a) and, therefore, under Section 13(1) of the Commercial Courts Act."

11. The reference to Order XLIII Rule 1 - relied upon on behalf of SDMC in the context of this case, in the opinion of this court, is misplaced. Order XLIII Rule 1(q), upon which considerable emphasis was placed to say that the appeals against directions to secure amounts during pendency of proceedings applies to suits and suits alone (as is evident from Order XXXVIII and all the attendant provisions), and not to proceedings in respect of an award. Thus, reference to Order XLIII to "draw in" the jurisdiction of the Division Bench, is wholly unjustified. Likewise, the Court also rejects the appellant's arguments that Section 36 of the Arbitration Act attracts the provisions of the Code of Civil Procedure. In fact, Section 36 refers to and directs courts to follow CPC in proceedings relating to enforcement of arbitral awards. The logical corollary is that the provisions of the CPC that deal with the proceeding for enforcement of decrees and orders (such as in execution like Order XXI CPC), would be attracted.

12. In view of the above discussions, we conclude that the present appeal is not maintainable. The appellant's remedy clearly lies elsewhere. An attempt was made to urge that no litigant can be deprived of remedy if there is a grievance: ubi jus ibi remedium; however, that argument is wholly without substance because an appeal, it has been repeatedly emphasised, is a specific creation of statute and cannot be claimed as a matter of right. This was explained pithily in Ganga Bai v. Vijay Kumar, (1974) 2 SCC 393, in the following terms:

"There is a basic distinction between the right of suit and the right of appeal. There is an inherent right in every person to bring suit of a civil nature and unless the suit is barred by statute one may, at one's peril, bring a suit of one's choice. It is no answer to a suit howsoever frivolous the claim, that the law confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is quite the opposite. The right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. That explains why the right of appeal is described as a creature of statute."(emphasis supplied)

10. This decision has been specifically affirmed by the Supreme Court in BGS SGS SOMA JV (supra). In this regard, we may extract the following paragraphs from the said judgement:

"..........We may also advert to the fact that our judgment in Kandla2 was delivered on 7-2-2018, and was missed by the Division Bench in Antrix Corpn. Ltd.8, as the Division Bench had reserved judgment on 6-12-201719, even though it ultimately pronounced the judgment on 30-05-20188. The judgment in South Delhi Municipal Corpn. 12 was decided after reference was made to Kandla2, resulting in a deposit order being held to be not appealable under Section 37 of the Arbitration Act, 1996.

20. It is clear, therefore, that the appeals filed in the present case do not fall within Section 37 of the Arbitration Act, 1996 Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 7 of 9 Signing Date:17.12.2021 18:14:26 and are not maintainable." (emphasis supplied)

11. Reliance placed by Mr. Nandakumar on Future Retail Limited (supra) is misconceived, since the said decision has been squarely overruled by the Supreme Court in Amazon.com NV Investment Holdings LLC (supra). Therefore, it is clear to us that the present appeal is not maintainable under Section 37 of the Act.

12. On the second issue raised by Dr. George, we find that the appellant/petitioner has not assailed the initial order passed by the learned Single Judge on 24.07.2019 in the appellant's application preferred under Section 34 of the Act, but only the order passed on the application to seek modification/review of the said order has been assailed. Such an appeal is squarely barred under Order 47 Rule 7 CPC.

13. In Basant Kharbanda (supra), the Division Bench of this Court observed:

"4. It is not disputed that the review was sought for under Order 47 of the CPC. That very order which provides for filing of an application for review and the grounds therefore, also contains a prohibition on appeal from an order rejecting the application for review. The applicant who invoked the power of the Court conferred by Rule 1 of Order 47 must also suffer the limitation imposed by Rule 7 of the same i.e. Order 47.

5. In Shanker Motiram Nale VS. Shilolsing Gannusing Rajput, (1994) 2 SCC 753, an appeal was preferred against an order rejecting an application for review. Their Lordships held:--

"This appeal is obviously incompetent. It is against an order of a Division Bench of the High Court rejecting the application for review of a judgment and decree passed by a learned Single Judge, who seems to have retired in the meantime. It is not Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 8 of 9 Signing Date:17.12.2021 18:14:26 against the basic judgment. Order 47 Rule 7 of CPC bars an appeal against the appeal."

6. In Shah Babulal Khimji VS. Jayaben D. Kania & Anr., 1981 SC 1786, their Lordships have held: -

The concept of the Letters of Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position."(emphasis supplied)

14. For the aforesaid reason as well, the present appeal is not maintainable. The same is accordingly dismissed on both counts, leaving the parties to bear their respective costs.

VIPIN SANGHI, J JASMEET SINGH, J DECEMBER 14, 2021 ss Signature Not Verified Digitally Signed By:AMIT ARORA FAO (OS) (COMM) 169/2021 Page 9 of 9 Signing Date:17.12.2021 18:14:26