Bombay High Court
Suresh Jayantilal Ajmera And Others vs Rasiklal Gokaldas Ajmera And Others on 10 September, 1996
Equivalent citations: AIR1997BOM279, 1997(2)BOMCR30, 1997(1)MHLJ327, AIR 1997 BOMBAY 279, (1997) 2 ALLMR 648 (BOM), 1997 (2) ALL MR 648, 1996 (29) ARBI LR 580, (1997) 1 MAH LJ 327, (1996) 29 ARBILR 580, (1997) 2 BOM CR 30, 1997 (99) BOM LR 251, 1997 BOM LR 99 251
Author: D. G. Deshpande
Bench: D. G. Deshpande
ORDER Dr. B. P. Saraf, J.
1. This is an appeal from the order of the learned single Judge rejecting the application of the appellants under Section 28 of the Arbitration Act, 1940 (the "Act") for extending the time for making the award.
2. When this appeal was taken up for hearing Mr. Virendra Tulzapurkar, learned counsel for the respondents, raised a preliminary objection in regard to the maintainability of this appeal. It was contended that no a appeal lies against an order under Section 28 of the Act refusing to enlarge the time for making an award. Our attention was drawn to Section 39 of the Act, which provides for appeal, to show that an order under Section 28 refusing to enlarge time for making the award is not included in the list of appealable orders set out in sub-section (i) thereof. It was submitted that appeal lies under Section 39(i) of the Act only from the orders specified therein and "from no others". It was also submitted that no appeal lies from the impugned order even under caluse 15 of the Letters Patent in view of the specific prohibition contained in Section 39 of the Act. In support of the above contentions, reliance was placed by Mr. Tulzapurkar on the decisions of the Supreme Court in Union of India v. Mohindra Supply Co. and State of West Bengal v. M/s. Gourangalal Chatterjee, and the decisions of this Court in Shiv Omkar v. Bansidhar, ; Municipal Corpn. of Greater Bmbay v. Patel Engineering Co. Ltd., and M.H. Tejani v. Kulsumbai, . Our attention was also drawn to the decision of the Andhra Pradesh High Court, in P. Ramula v. N. Appalaswami, AIR 1957 Andh Pra 11.
3. In reply to the above preliminary objection of Mr. Tulzapurkar, Mr. Doctor, learned counsel for the appellant, submits that an order of the court under Section 28 of the Act refusing to extend the time for making an award amounts to supersession of the arbitration with in the meaning of Item (i) of the sub-section (1) of the Section 39 of the Act and hence appeal lies from such an order. In support of the above contention, MR. Doctor relies on the decision of the Kerala High Court in E. K. Abdulkhader Haji v. Thalakkal Kunhammad, and decision of the court in M. H. Tejani v. Kulsumbai, . In the alternative, MR. Doctor a submits that even if the no appeal lies from the above order under section 39(1) of the Arbitration Act, appeal would be maintainable under clause 15 of the Letters Patent. Reliance is placed in support of this contention on the decision of Madras High Court in Martirosi v. Subramaniam Chettiar, AIR 1928 Mad 69. So far as the decision of the Bombay High Court in Shiv Omkar v. Bansidhar (supra) is concerned, Mr., Doctor submits that the ratio of the said decision will not apply to the present case because that was a case where time had been extended by the court and the challenge was to the extension of time, whereas in the present case the learned Judge has refused to extend time which has the effect of superseding the arbitration. This aspect of the controversy, according to Mr. Doctor, was not before this Court n the above case and hence the ratio of the same cannot help the respondents in this appeal.
4. We have carefully considered the rival submissions of the counsel for the parties. The law is well settled that right of appeal is not an inherent right. It is a creature of statute. Therefore, right of appeal must be expressly conferred by the statute. If right of appeal is not given by the statute, it cannot be implied. As observed by the Supreme Court in Ganga v. Vijay , right of appeal inheres in no one and, therefore, an appeal for its maintainability must have the clear authority of the law. In the instant case, there is no dispute about the fact that in the Arbitration Act the legislature has provided for appeal only form certain orders passed under that Act. Such orders are specified in clauses (i) to (vi) of sub-section (1) of Section 39 thereof. While providing for appeal form the specified orders, the legislature has also categorically stated that appeal shall lie only form those orders and "from no others". Section 39 read 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 bear appeals from the original decrees of the court passed the order:
An order-
(i) supreseding 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 the 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 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".
It is clear form a plain reading of the above section that the right of appeal against orders passed under the Arbitration Act has been confined to the orders specifially set out in clauses (i) to (vi) of sub-section (1). The legislature in its wisdom even thought it fit to make this intention clear by specifically declaring that appeal shall lie only from those orders and from no others. In such a situation, appeal will be maintainable form an orders passed under this Act only if that the order meets the description of any of the orders set out in clauses (i) to (iv) of sub-section (1) of the section 39. If an order does not fall in any of those clauses, no appeal will lie from that order. Moreover, by Section 39(1), appeal against other orders being expressly taken away, no appeal would lie against such other orders under clause 15 of the Letters Patent also.
5. We are supported in our above conclusion by the decisions of the Supreme Court in Union of India v. Mohindra Supply Co., and State of West Bengal v. Gourangalal Chatterjee . In Union of India v. Mohindra Supply Co., (supra), the Supreme Court observed that under Section 39(1), an appeal lies from the orders specified in that sub-section and from the no others. It was further observed that the legislature has plainly expressed itself that the right to appeal against orders passed under the Arbitration Act may be exercised only in respect of certain specified orders. The right of appeal against other orders has been expressly taken away. The Supreme Court also made it clear that in view of the express prohibition contained in Section 39(1), a right to appeal from a judgment which might otherwise be available under the Letters Patent is also restricted. The above decision was referred to with approval by the Supreme Court in State of West Bengal v. Gourangalal Chatterjee (supra). It was reiterated that the under sub-section (1) of Section 39, an appeal shall lie only from the orders mentioned in that sub-section itself.
6. Reference may also be made in this connection to the decision of the Court in Municipal Corporation of Greater Bombay v. Patel Engineering company Limited (supra), where it was held that Section 39(1) of the Arbitration Act takes away the right of appeal given by clause 15 of the Letters patent. The following observation in the above decision are pertinent:
".........If all that was intended to provide by sub-section (1) of Section Act was to give a right of appeal, there was no necessity, in the first instance, to add to it the words "and of from no others". The combined effect of the words "and from no others" and the omission of the words "and save as otherwise expressly provided in the body of this Code or by any law for the time being in force" is, so far as Section 39(1) of the Act is concerned, to take away the right of appeal given under Cl. 15 of the Letters Patent . In our view, recourse of Cl. of the 15 of the Letters Patent for the purpose of considering maintainability of this appeal is not permitted as Clause 15 of the Letters patent are required to be raed subject to the provisions of Section 39 of the Act".
7. So far as the decision of the Madras High Court in Martirtosi v. Subramaniam Chettiar AIR 1928 Mad 69 (FB) which has been referred by Mr.Doctor in support of his contention that an appeal would lie under Clause 15 of the Letters Patent against an order passed under Section 28 of the Act refusing to enlarge the time for making the award is concerned, we find that the reliance on the said decision is wholly misplaced. The above decision was rendered before the enactment of the Arbitration Act of 1940 where against any order except those specified in sub-section (1) thereof.
8. The only question that survives for consideration in this appeal, therefore, is whether an order of the Court passed under Section 28 of the Act refusing to enlarge the time for making the award meets the description of any of the orders set out in clauses (i) to (iv) of sub-section (1) Section 39 or, to put it differently, whether it falls under any of those six clauses. Accordingly to Mr. Doctor, the learned counsel for the appellants, such an order falls under clause (i) which speaks of an order "superseding arbitration." The submission of Mr. Doctor, in other words, is that an order refusing to extend the time for making an award under Section 28 of the Act is an order superseding the arbitration and, therefore, appeal would lie from the same.
9. We have given our careful consideration to the above submission of Mr. Doctor. We, however find it extremely difficult to accept the same. In our opinion, an order under Section 28 of the Act extending the time or refusing to extend the time for making an award, cannot be construed as meaning an order superseding the arbitration so as to be appealable under sub-section (1) of Section 39 of the Act.
10. We are supported in our above conclusion by the Division Bench decision of this Court in Shiv Omkar v. Bansidhar, where it was held that an order passed by the trial Judge extending time for making award is not appealble. In the above case speaking for the Bench, Gajendragadkar, J. ( as his Lordship then was) said ( at p. 461):
"..........the contention that extension of time should not have been allowed by the learned Judge cannot, in our opinion, be made by the appellants because under Section 39, Arbitration Act, an order passed by the trial Judge extending time is not appealable. Legislature has clearly contemplated that the question as to whether time should be extended should be left to the discretion of the trial Judge and the order that the trial Judge may pass in the exercise of his discretion should be regarded as final."
In the above case, application of the respondents for extending time was considered with the appellants' application for setting aside the award. It was therefore, contended that because of the consolidation, appeal would lie also against the order under Section 28 extending time. Rejecting the above contention, it was observed (at p. 461):
"But this consolidation cannot give the appellant a right to challenge an order which, under the law is not appealable. Therefore, in our opinion, it is unnecessary for us to consider whether the learned Judge was right or wrong in extending the time for making the award".
10A. To the same effects the decision of the Orissa High Court in R.N. Rice Mills v. State of Orissa, , where it was held that a refusal to extend time by the court on the application of the arbitrators or the party does not amount to an order superseding the arbitration so as to be appealable under sub- section (1) of section 39 of the Arbitration Act, 1940.
11. We have also considered the decision of the Kerala High Court in E. K. Abdul khader Haji v. Thalakkal Kunhammad, , where a contrary view has been taken. The controversy before the Kerala High Court was also whether appeal lies under Section 39 of the Arbitration Act from the order of the order of the Court refusing to enlarge time for making the award. The Kerala High Court was of the view that appeal would lie against such an order under Section 39(1) of the Act as in their opinion an order under S. 28 of the Act refusing to enlarge time for making the award a was really an order superseding an arbitration. It was observed:
"The effect of an order refusing to enlarge time for making the award is that the arbitration as per the agreement of the parties appointing the arbitrator comes to a grinding half. If the order becomes final, it goes without saying that there can be no arbitration as per the agreement of the parties appointing the arbitrator. Though the order does not say in so many words that the arbitration is superseded, there can not be any arbitration as per the agreement after the Court refused to enlarge time for making the award. So, it has be be taken for granted that the by refusing to enlarge time for making the award the Court really an order supersedes an arbitration. Hence, it goes without saying that there is an appeal from such an order passed by the Court under Section 28 of the Arbitration Act."
We have given our careful consideration to the above decision of the Kerala High Court. We, however, find it extremely difficult to agree with the reasoning and conclusion of the Kerala High Court. In our opinion by no process of interpretation or reasoning, an order under Section 28 of the Act refusing to extend time for making the award can be construed as an order superseding the arbitration.
12. Before parting with his appeal it may be expedient to refer the decision of the Court in M. H., Tejani, v. Kulsumbai, on which much reliance was placed by Mr. Doctor, learned counsel for the appellants, in support of his contention that an order passed under Section 28 of the Act can be construed as an order superseding the arbitration . We have given our careful consideration to the above decision. The controversy in that case was whether an order under clause (b) of the sub-section (2) of Section 12 of the Act can be construed as an order superseding the arbitration. The contention before the learned single Judge in that case was that supersession of an arbitration has been dealt with in Section 19 and 25 of the Act and hence an order under clause (b) of sub-section (2) of section 12 which does not refer or use the exprssion "supersession" can not be costued be as an order of supersession of the award. The learned single Judge considered the provisions of clause (b) of sub-section (2) of section 12 of the Act and held:
"When the Court passes an order that the arbitration agreement shall cease to have effect with respect to the difference referred, the arbitration agreement itself ceases to have effect with respect to that difference and in such an eventuality there is no question of the arbitration agreement subsisting with respect to the difference which had been referred to the arbitrator or arbitrators".
It was observed that though Section 19 of and 25 were the only two section which employ the expression "superseding an arbitration" , the effect of such expression was the same as when the Court says that the arbitration agreement shall cease to have any effect.
13. On a carful perusal of the above decison , we fail to understand how the said decision is relevant in the context of the controversy before us. In our opinion, the ratio of the above decision has no application to an order under Section 28 of the Act because such an order cannot have the effect of superseding the arbitration. When by by an order under Section 28 of the Act the Court refuses to extend time for making the award, it does not say that the arbitration agreement shall cease to have effect of nor an order under Section 28 can have the effect of setting aside the arbitration agreement. In that view of the matter, reliance on the above decision by the appellants is wholly misconceived.
14. In view of the above, we are of the clear opinion that no appeal is lies against the impugned order passed by the learned single judge under Section 28 of the Act refusing to extend the time of making the award either under Section 39(1) of the Arbitration Act or under clause 15 of the Letters Patent. Accordingly, we accept the preliminary objection of the learned counsel for the respondents Mr. Tulzapurkar to the maintainability of this appeal and dismiss the same of that ground itself without going into the merits of the case.
15. In the facts and circumstances of the case, we make no order as to costs.
Appeal dismissed.