Jammu & Kashmir High Court - Srinagar Bench
Vethesta Construction And Anr vs State And Ors on 10 July, 2012
IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR LPA No. 168 of 2011 Vethesta Construction and anr. Petitioners State and ors. Respondents !Mr. R.A. Jan Sr. Advocate Ms. Sabeena, Advocate ^Mr. Allau din Ganaie, Advocate Honble Mr. Justice Muzaffar Hussain Attar, Judge Honble Mr. Mr. Justice Hasnain Massodi, Judge Date:10/07/2012 : J U D G M E N T :
Muzaffar Hussain Attar The appellant filed an application for grant of interim relief Under section 9 of Arbitration and Conciliation Act of 1997(for short Act of 1997). This application was dismissed by the learned Principal District Judge, Anantnag, vide order dated 28.06.2011. The appellant feeling aggrieved of the said order, challenged the same in Statutory Appeal No. 02/11, which appeal was dismissed by the ld Single Judge on 11th July 2011. The appellant in order to vindicate his legal rights has filed this LPA praying therein that the impugned judgment/orders be set aside and his application filed u/s 9 of the Act of 1997 be allowed. The court on 12th Sept. 2011 while modifying the earlier interim order, provided that question about the maintainability of Letters Patent Appeal would be considered at the time of hearing of the appeal.
Mr. Allau din Ganaie, Ld Dy. AG, raised preliminary objection about the maintainability of this LPA on the ground that after dismissal of statutory appeal filed by the appellants u/s 37 of the Act of 1997, in view of the language of the said Section, no further appeal can be filed in this court. Ld counsel in this behalf referred to section 37(3) of the Act of 1997. ld counsel in support of his contention referred to and relied upon the judgment of the Honble Supreme Court in case titled P.S. Sathappen v. Andra Bank Ltd reported in 2004 SC 5152 and the judgment of the Honble Supreme Court reported in 2011 AIR SC W 4047 (AIR 2011 SC 2649) case titled Fuerst Day Lawson Ltd v. Jindal Exports Ltd and other connected cases. Ld counsel also referred to the Division Bench judgment of this court in case titled Gh. Rasool Chaku & Ors v. Gh. Ahmad Chaku and others LPA No. 273/09 decided on 7th July 2011. Ld counsel also referred to, the case title G. M. Pampori v. State of J&K and ors, reported in AIR 2001 JK 18 and submitted that LPA being not maintainable merits dismissal.
Mr. R.A. Jan, ld Sr. counsel appearing on behalf of the appellants with all his eloquence and vehemence submitted that LPA is maintainable. Ld counsel referred to Section 37 (1 & 3) of the Act of 1997 and submitted that on the plain language of the Section 37 (1 & 3) the right to file LPA, which has been given under the charter of the High court, has not been taken away. Ld counsel submitted had it been intention of the legislatures to take away the right to file LPA they would have specifically mentioned the same in the Section 37 of the Act of 1997. Ld counsel was at pains to explain that the expression used in Section 37 (1) of the Act of 1997 that appeal shall lie from the orders mentioned therein and from no others would mean that appeal under the said provision could be filed only in respect of the orders mention whereof is made at (a), (b) of (1) (2) of section 37 of the Act of 1997, and in view of the language used in the said provision of law- appeal against the other orders would not be competent. Ld counsel submitted that Sub section (3) of Section 37 of the Act of 1997, bars filing of a second appeal from the order passed on appeal under the said section, but it does not take away the right to file an LPA. Ld counsel also referred to Section 50 of the Arbitration and Conciliation Act of 1996 (for short Act of 1996), a Central Act, and submitted that the law laid down in Fuerst Day case was passed on consideration of Section 50 of the Act of 1996. Ld counsel submitted that the provisions of Section 37 of the Act of 1997 and Section 50 of the Act of 1996, operate in different circumstances and are not similar. Ld counsel submitted that the judgment(s) (supra) are of no help to the respondents for seeking declaration that this appeal is incompetent. Ld counsel further submitted that power of the High Court in hearing an LPA is akin to Constitutional power. Ld counsel submitted that the jurisdiction and power to hear an LPA cannot be taken away impliedly but can be taken away if there is express bar in the Statute. Ld counsel submitted that there being no express bar in the statute viz Section 37 of the Act of 1997 in respect of filing of an LPA,. this appeal is competent and maintainable. Ld counsel in support of his contention referred to and relied upon decision of the Honble Supreme court reported in 2009 AIR SCW 668, AIR 1998 SC 424, (2000) 4 SCC 368, (1998) 1 SCC 500, (1999) 2 SCC 541, AIR 2002 SC 1626 and (1986) Suppl. SC 401, and submitted that this LPA is maintainable. Ld counsel argued on the merits of the case also to show that the order passed by the ld single judge as also by the court of first instance is illegal. Before dealing with the arguments of the ld counsel for parties, the facts of the case in brief are taken note of :
The appellants were allotted work for execution of construction work of up gradation of roads from Achabal Soumbran to Chatpal. An agreement was executed between the parties on 30th May 2009, authorizing the appellants to proceed with the execution of construction work. The construction work was to be initiated and completed in accordance with the terms and conditions of the contract. Allotted work was to be completed within eighteen months. On failure of the appellants to complete the work within stipulated period, respondents issued communications informing the appellants that despite providing ample opportunities the work has not been completed within the stipulated period. The respondents terminated the contract and initiated steps for re-allotment of work. A fresh tender notice was issued. The appellants feeling aggrieved of the act of the respondents filed application U/s 9 of the Act of 1997 before the court of Principal District Judge, Anantnag, and sought interim reliefs. The application was dismissed against which the appeal U/s 37 of the Act of 1997 was filed. The statutory appeal suffered dismissal consequent upon which LPA has been filed.
In order to appreciate the issue raised, it is deemed appropriate to take notice of Section 39 of the J&K Arbitration Act, 2002 (1945 A.D) (for short Act of 2002), Section 37 of the Act of 1997, Section 37 of the Act of 1996 and Section 50 of the Act of 1996.
Section 39 of the Act of 2002 Appealable orders.- (1) An appeal shall lie from the following orders passed under this Act (and from no others) to the court authorized by law to hear appeals from original decrees of the Court passing the 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 when 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.
Section 37 of the Act of 1997 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
3. (2) an appeal also lie from an order granting or refusing to grant an interim measure under section 17 to a Court.
(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 Act of 1996 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
3. (2) an appeal also lie from an order 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 50 of the Act of 1996.
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.
These Provisions of law are almost similar/parametri to each other. Before dealing with the arguments advanced at Bar, it is deemed necessary to ascertain the purpose of enacting Arbitration/Conciliation Act. The dispute resolution mechanism is provided by the laws enacted by the State Legislature. The rights are sought to be enforced which arise under common law, and which are conferred upon a person by legislative enactments. In order to enforce rights courts are established in accordance with the mandate of the legislative enactments. With the passage of time, the nature of disputes and enforcement of rights have assumed significant importance in the lives of the people. The people seek redressal of their disputes in the court of law. It is of common knowledge that courts for variety of reasons take long time in disposing of the cases. The delayed disposal of cases some time has effect of denying justice to the litigant party. The procedural wrangling involved in arriving at a just and lawful conclusion in court of law, and further appeal(s) provided by the statute against the orders/judgment passed by the court(s), sets a litigant on a journey, which for the above stated reasons may not come to an end in ones life time. Sometimes the litigating party does not reap the benefit during his life time and the litigation transcends to next generations. In order to provide an effective and expeditious mechanism for dispute resolution and in order to facilitate non conventional settlement of disputes, Arbitration Act was brought into existence. With the passage of time and because of new challenges the laws relating to domestic arbitration and conciliation have been consolidated and amended in terms of the Act of 1997 by the State Government and by the Central Government in 1996. The salutary purpose underlying Arbitration and Conciliation laws is to afford opportunity to the parties, who raise disputes against each other, to settle the same by adopting and following the procedure and mechanism devised by them. The agreement between the contracting parties mostly provide for referring any dispute which may arise, for settlement and resolution to an Arbitrator. The legislature by enacting the Arbitration and Conciliation laws is only acting as a facilitator between the contracting parties and is providing support mechanism. The purpose underlying the Arbitration/Conciliation laws was, and is, to ensure settlement of the disputes between the contracting parties by a person/authority of their choice and without facing the ordeals of procedural laws as also the substantive laws. The Arbitrator is normally a person of choice of the parties, and on failure to nominate an Arbitrator, same is appointed by highest judicial authority of the State in terms of Section 11(6) of the Act of 1997. The method and manner in which the Act of 1997 has been devised is to ensure that the parties are not made to suffer because of procedural wranglings. The purpose to be achieved under the Act is to allow the parties to arrive at a conclusion at an earliest. The Arbitrator has not to follow the procedure as is being followed by the regular courts. The provisions of appeal/revision which are available in the regular courts to a litigant are not made available to the parties under the Act of 1997. One of the essential and fundamental purpose to be achieved under the Act of 1997 is to avoid delay in deciding the disputes. It is in this back drop, it is to be seen whether LPA in setting of the Act of 1997, which is a complete code in itself, would be competent and maintainable.
The Section 37 (3) of the Act of 1997 specifically provides that no second appeal shall lie from an order passed in an appeal under this section. The partys right to file an appeal to the Supreme court, however, is retained. Admittedly an application was filed U/s 9 of the Act of 1997 by the appellant before the court of ld Pr. District Judge, Anantnag. The application was dismissed. The Act of 1997 authorizes for filing of an appeal against such an order in terms of the Section 37 thereof. The statutory appeal has also been dismissed by the ld single judge. It is in the aforestated backdrop the intendment of the legislature in enacting Sub section (3) of Section 37 of the Act of 1997 is to be appreciated and understood. It is settled proposition of law that an appeal is creature of Statute and can be filed only when authorized by Statute. The Civil Procedure Code provides for filing of an appeal against decrees in terms of Section 96 and second appeal in terms of Section 100-A. Likewise right to file an appeal is also provided against the orders as well. The expression used in Sub section (3) of Section 37 of the Act of 1997 no second appeal in the backdrop in which the Act of 1997 is couched, would mean that no another appeal would lie. This another appeal would include the LPA as well. The legislature in their wisdom after conferring the right of filing an appeal intended to bring to an end the litigation by curtailing the further right of appeal in the same court. The legislators, however, have in specific terms retained the right to file appeal to the Supreme Court. Placing of any other interpretation on sub section (3) of Section 37 of the Act., of 1997, would defeat the very purpose of Arbitration and Conciliation Act for which it has been brought into existence. Support to this reasoning, is derived from the fact that highest judicial authority, or his nominee, in the State has been conferred the power of appointing an arbitrator. This has been done only to ensure that the appointment of the arbitrator does not become subject matter of challenge either by filing of an appeal or by filing of writ petition in the same court. The legislatures have in their wisdom made earnest endeavour to ensure that efforts to have the dispute resolved through an arbitrator does not get hijacked by procedural piracy.
Section 39 of the Arbitration Act of 1940 (Central Act), and section 37 of the Act of 1996 are almost similar. This is the observation made by the Honble Supreme Court while concluding the paragraph 30 of the Fuerst Day case. Section 39 of the Act of 2002 is in parametri with section 39 of the Act of 1940 and is similar to section 37 of the Act of 1997. The Honble S.C in the Fuerst Day case at paragraph 30 has referred to judgment of the said court in case titled The Union of India, appellant v. the Mohindra Supply Co. respondent reported in AIR 1962 SC 256. The Honble Supreme Court was dealing with the issue as to whether LPA was maintainable in view of sub section (2) of section 39 of the Arbitration Act of 1940, which is in parametri with section 39 of the Act of 2002. The Honble Supreme court at paragraph (3) ruled that two sub sections of section 39 are manifestly part of single legislative pattern. By sub section (1) the right to appeal is conferred against the specified orders and against no other orders; and from an appellate order passed under sub section (1) no second appeal except to the Supreme court would lie. The Honble Supreme Court in Mohindra Supply case held that LPA was not competent and maintainable against an order passed in an appeal filed u/s 39 of the act of 1940 in view of the bar contained in Sub section (2) thereof. As already stated Section 39 of the Act of 1940 is in parametri with section 39 of the Act of 2002. Section 39 of the Act of 1940 has been said to be similar to Section 37 of the Act of 1996 in Fuerst Day Lawson ltd by the Honble Supreme Court. Section 37 of the Act of 1997 is in parametri to Section 37 of the Act of 1996. The judgment handed down by the Honble S.C in Mohindra Supply case in all fours applies to this case. In that case as already stated in view of language of Section 39 of the Act of 1940 it was held that LPA was not maintainable against an order passed u/s 39 thereof. On the same analogy and in view of the law laid down by the Honble Supreme Court in Mohindra Supply case this LPA is not maintainable. The Honble Supreme Court in Constitutional bench Judgment reported in AIR 2004 SC 5152 had the occasion to consider the Mohindra Co. supply case and at paragraphs-9&10 of the judgment after referring to the Mohindra supply company case observed as under :-
9. This question was also considered by four Judge Bench of this Court In the case of (AIR 1962) of Union of India v. Mahindra Supply Company reported in (l962) 3.SCR 497. In this case, a dispute between the parties was referred to Arbitration. The Arbitrator gave an award. An application was made for setting aside the award. That application was rejected.
Against that order an Appeal was preferred to the High Court under Section 39(1) of the Indian Arbitration Act. 1940. A single Judge of the High Court allowed the Appeal and set aside the award. Thereupon a Letters Patent Appeal was filed. The question was whether a Letters Patent Appeal was barred. Section 39 of the Indian Arbitration Act reads as follows:
(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorized 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 a 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 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.
It is thus to be seen that Section 39 specifically barred a second Appeal. Also to be noticed that in Section 39 there is no saving clause similar to that in Section 104 (I). C.P.C. Further, in the Arbitration Act there is no provision similar to Section 4, C.P.C. It was submitted that, even though Section 39 barred a second Appeal, an analogy should be taken from Section 104, C.P.C. and It must be held that a Letters Patent Appeal was maintainable. In considering this submission the conflict of opinions amongst the various High Courts regarding maintainability of a Letters Patent Appeal, in spite of Section 104, C.P.C ., was set out and this Court then held as follows: "The legislature in this state of affairs intervened, and in the Code of 1908 incorporated S. 4 which by the first sub-section provided:
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 now In force or any special Jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time being in force:;
and enacted in S. 104 (I) that an appeal shall be from the orders set out therein and save as otherwise expressly provided, in the body of the Code or by any law for the time being In force, from no other orders. The legislature also expressly provided that no appeal shall lie from any order passed In appeal under this section. Section 105 was substantially in the same terms as S. 591 of the earlier Code.
The intention of the legislature in enacting sub-s (1) of S. 104 is clear: the right to appeal conferred by any other law for the time being in force is expressly preserved. This intention is emphasized by S. 4 which provides that in the absence of any specific provision to the contrary, nothing in the Code is intended to limit or otherwise affect any special Jurisdiction or power conferred by or under any other law for the time being in force. The right to appeal against judgments (which did not amount to decrees) under the Letters Patent was therefore not affected by S. 104(1) of the Code of Civil Procedure, 1908. Thus a four Judges Bench of this Court, as early in 1962, recognized that the legislature had now specifically saved a Letters Patent Appeal. This Court then went on to hold that Section 4, C.P.C. provided as follows:
"By this clause, a right to appeal except in the cases specified, from one Judge of the High Court to a Division Bench is expressly granted. But the Letters Patent are declared by Cl.37 subject to the legislative power of the Governor-General in Council and also of the Governor-In-Council under the Government of lndia Act,1915,and may In all respects be amended or altered in exercise of legislative authority. Under S. 39[1], an appeal lies from the orders specified in that sub-section and from no others. The legislature has plainly expressed Itself that the right of appeal against orders passed under the Arbitration Act may be exercised only In respect of certain orders, The right of appeal against other orders is expressly taken away. If by the express provision coned In S.39 (1), a right to appeal from a judgment which may otherwise be available under the Letters Patent Is restricted, there is no ground for holding that Cl. (2) does not similarly restrict the exercise of appellate power granted by the Letters Patent. If for reasons aforementioned the expression second appeal" includes an appeal under the Letters Patent, It would be Impossible to hold that notwithstanding the express prohibition, an appeal under the Letter Patent from an order passed in appeal under sub sec.( 1) is competent.
10. This Court however noticed that In the Arbitration Act, there was no provision similar to Section 4 of the Code of Civil Procedure which preserved powers reserved to Courts under special statutes. Under the Code of Civil Procedure, the right to appeal under the Letters Patent is saved both by Section 4 and the clause contained in Section 104(1), but by the Arbitration Act,1940, the Jurisdiction of the Courts under any other law for the time being in force is not saved. The right of appeal could therefore be exercised against orders in arbitration proceedings only under Section 39, and no appeal from the appellate order (except an appeal to this Court). The provisions in the Letters Patent providing for appeal, in so far as they related to orders passed In Arbitration proceedings, were held to be subject to the provisions of Section 39(1) and (2) of the Arbitration Act, as the same ,is a self contained Code relating to arbitration. The law laid by the Honble Supreme Court in Mohindra supply case, thus, holds the field even on date. The Honble S.C in Fuerst Day Lawson ltd case in which it was dealing with Section 50 of the Act of 1996 after considering entire case law on the subject held that LPA in view of the mandate contained in Section 50 of the Act of 1996 is not maintainable. Both appeal provisions contained in Sec. 37 and Sec. 50 operate in same circumstances, viz provide for filing of appeal against certain orders. Both are appeal Provisions and both have identical provisions which bar further appeal, but both retain the right to file appeal to Supreme Court. The law laid in Fuerst Day Lawson case would, thus, govern the case on hand also. The Division Bench of this court in case reported in AIR 2001 JK 18, has held, at paragraph-7 thereof that against an order passed by the ld single judge u/s 39 of the Act of 2002, LPA is not maintainable. The D.B of this court (of which one of us, Honble Massodi J, was a member) in latest case titled Gh. Rasool Chaku & Ors v. Gh. Ahmad Chaku & ors LPA No. 273/09 decided on 7th July 2011, xerox copy of which, was produced by ld counsel for the respondents has specifically ruled that LPA against the order passed u/s 37 (1) of the Act of 1997 is not maintainable. For the reasons recorded in this judgment, we concur with the conclusions of the court recorded in aforementioned judgment.
The decision of the Honble S.C reported in 2009 AIR SC W 668 referred to by ld counsel for the appellant for maintainability of the LPA is the judgment which has arisen out of Land Acquisition Act. Since it has been the consistent view of the Honble Supreme Court right from Mohindra Supply case till Fuerst Day Lawson case, 2011, that LPA under Arbitration/conciliation Act is not maintainable, no benefit can be derived by the ld counsel for the appellant from the aforementioned judgment of the Honble S.C which has arisen out of Land Acquisition Act. Similarly, the decision of the Honble S.C reported in 1998 SC 424 is based on the Specific Relief Act 1963 and would not be applicable to the facts of this case. The question whether an appeal u/s 37 of the Act of 1940 would lie to the D.B of the High Court from an order of ld single judge remitting the award to Arbitrator for arbitration, was left unanswered. The reference to Orma Impex Pvt ld case is of no consequences as in view of the observation made in Fuerst Day Lawson case the parties had compromised and matter could not decided by the court. In Andra Trading company case reported in AIR 2002 SC 1626, it was held by the Honble S.C that no LPA was maintainable against an order of the ld single judge rejecting an application for setting aside the ex-parte decree for making award Rule of the court. Similarly, in Umaji Keshoo Meshram and ors v. Radhikabai and ors case reported in 1986 (Suppl) SCC 401, the court was concerned as to whether LPA would be maintainable when petition is filed under Article 226 and 227 of the Constitution of India. The issue involved in this case was not the subject matter of the said case. The Honble S.C in the said judgment ruled that when petition is filed both under Article 226 and 227 of the Constitution of India the LPA would be maintainable. The judgment reported in (2011) 7 SCC 69 deals with the interpretation of the Constitution.
For our aforestated reasons we declare that a Letters Patent Appeal filed against an order passed by appellate court in an appeal filed under Section 37(1) (2) of Arbitration and Conciliation Act, 1997 is not maintainable and in sequel thereto we hold this LPA is not competent. Since it is held that LPA is not maintainable there is no need to deal with the merits of the case. The LPA is accordingly dismissed.
(Hasnain Massodi) (Muzaffar Hussain Attar)
Judge Judge
Srinagar
10.07.2012
Ayaz/Secy