REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION (CIVIL) NO.11945 OF 2010

FUERST DAY LAWSON LTD. … PETITIONER

VERSUS

JINDAL EXPORTS LTD. … RESPONDENT

WITH

SPECIAL LEAVE PETITION (CIVIL) NO.13625 OF 2010

FUERST DAY LAWSON LTD. … PETITIONER

VERSUS

JINDAL EXPORTS LTD. … RESPONDENT

WITH

SPECIAL LEAVE PETITION (CIVIL) NOS.13626-13629 OF 2010

JINDAL EXPORTS LIMITED … PETITIONER

VERSUS

FUERST DAY LAWSON … RESPONDENT

WITH

SPECIAL LEAVE PETITION (CIVIL) NOS.22318-22321 OF 2010

ITE INDIA P. LTD. … PETITIONER

VERSUS

MUKESH SHARMA & ORS. … RESPONDENTS

WITH

CIVIL APPEAL NO.5156 OF 2011 [ARISING OUT OF SLP (CIVIL) NO.31068 OF 2009]

SHIVNATH RAI HARNARAIN  INDIA COMPANY … APPELLANT

VERSUS

GLENCORE GRAIN ROTTERDAM … RESPONDENT

WITH

CIVIL APPEAL NO.5157 OF 2011 [ARISING OUT OF SLP (CIVIL) NO.4648 OF 2010]

TINNA FINEX LTD. … APPELLANT VERSUS

NATIONAL ABILITY S.A. & ANR. … RESPONDENTS

2

AND

CIVIL APPEAL NO.36 OF 2010

SEA STREAM NAVIGATION LTD. … APPELLANT

VERSUS

LMJ INTERNATIONAL LTD. … RESPONDENT

J U D G M E N T

AFTAB ALAM, J.

1. Leave granted in SLP (C) No.31068 of 2009 and SLP (C) No.4648 of  

2010.

2. The common question that arises for consideration by the Court in this  

batch of cases is whether an order, though not appealable under section 50 of  

the Arbitration and Conciliation Act, 1996 (hereinafter “1996 Act”), would  

nevertheless be subject to appeal under the relevant provision of the Letters  

Patent of the High Court. In other words even though the Arbitration Act  

does not envisage or permit an appeal from the order, the party aggrieved by  

it can still have his way, by-passing the Act and taking recourse to another  

jurisdiction.

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3. Mr. C.A. Sundaram, senior advocate, however, who led the arguments  

on behalf of the appellants, would like to frame the question differently. He  

would ask whether there is any provision in the 1996 Act that can be said to  

exclude the jurisdiction  of  the High Court  under its  Letters  Patent  either  

expressly or even impliedly. He would say that the jurisdiction of the High  

Court under the Letters Patent is an independent jurisdiction and as long as  

the order qualifies for an appeal under the Letters Patent an appeal from that  

order would be, undoubtedly, maintainable before the High Court.

4. A correct answer to both the questions would depend upon how the  

1996 Act is to be viewed. Do the provisions of the 1996 Act constitute a  

complete  code  for  matters  arising  out  of  an  arbitration  proceeding,  the  

making of the award and the enforcement of the award? If the answer to the  

question  is  in  the  affirmative  then,  obviously,  all  other  jurisdictions,  

including  the  letters  patent  jurisdiction  of  the  High  Court  would  stand  

excluded  but  in  case  the  answer  is  in  the  negative  then,  of  course,  the  

contention of Mr. Sundaram must be accepted.

5. The  batch  presently  before  the  Court  originally  consisted  of  nine  

cases,  out  of  which  SLP  (C)  No.16908  of  2010  ended  in  compromise  

between the parties.  Of the remaining eight  cases,  SLP (C) No.13625 of  

2010 and SLP (C) No.11945 of 2010 are unrelated and have been wrongly  

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put  in  this  batch.  These  two SLPs are  filed against  a  common judgment  

passed by a single judge of the Delhi High Court insofar as though allowing  

the petitioners’ application for enforcement of two foreign awards, the High  

Court  declined to pass any order  for payment of  interest  on the awarded  

amounts payable to the petitioners. These two cases are, therefore, directed  

to be de-tagged and listed separately. This leaves behind six cases. At the  

conclusion of hearing, one of the cases, being SLP (C) No.31067 of 2009  

was directed, on the prayer made by the counsel for the petitioner, to be de-

linked from the batch and to be listed separately. It, however, appears that  

the direction was wrongly obtained since that case and another case in the  

batch, SLP (C) No.31068 of 2009 arise from a common order and SLP (C)  

No.31067 of 2009 would also be fully governed by this judgment. Be that as  

it may, the direction for de-linking is already made and, hence, that case will  

be separately listed and dealt with in due course. Of the remaining five cases  

four come from the Delhi High Court and one from the Calcutta High Court.  

In  SLP  (C)  No.4648  of  2010  and  SLP  (C)  No.31068  of  2010,  the  

applications  filed  by  the  respective  respondents  in  these  cases,  for  

enforcement of the foreign award in their favour were allowed by orders  

passed by a single judge of the High Court. Against the orders of the single  

judge, the petitioners in these SLPs filed appeals before the division bench  

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of the High Court. All the appeals were taken together and dismissed by a  

common order as not maintainable. The petitioners have come before this  

Court against the order passed by the division bench only, on the question of  

maintainability of their appeals. Civil Appeal No.36 of 2010 coming from  

the Calcutta High Court is opposite of the aforementioned two SLPs coming  

from the Delhi High Court. In this case, against an order passed by a single  

judge of the High Court, by which he granted relief for enforcement of a  

foreign award, an appeal was preferred before the division bench of the High  

Court. The appeal was admitted but a preliminary objection was raised in  

regard to  its  maintainability  in view of section 50 of  the 1996 Act.  The  

division  bench  by  order  dated  May  8,  2007  rejected  the  preliminary  

objection holding that the appeal was maintainable.

6. In SLP (C) Nos.22318-22321 of 2010 a single judge of the Delhi High  

Court  dismissed the suit filed by the petitioner and allowed the application  

filed  by  defendant  nos.3-5 referring the  parties  to  arbitration  in  terms of  

section 45 of the 1996 Act. The petitioner’s appeal before the division bench  

was dismissed as not maintainable. The SLP (C) Nos. 22318-22321 of 2010  

are filed under Article 136 of the Constitution challenging orders passed by  

both the division bench and the single judge of the High Court.  

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7. The petitioner in SLP (C) Nos.13626-13629 of 2010 is the respondent  

in SLP (C) No.13625 of 2010 and SLP (C) No.11945 of 2010 which have  

been held to be unrelated to the batch. Against the order passed by a single  

judge of the High Court for enforcement of two foreign awards against it,  

the petitioner in SLP (C) Nos.13626-13629 of 2010, first preferred an appeal  

before the division bench of the High Court, but the appeal was dismissed by  

the  division  bench  as  not  maintainable.  The  present  SLPs  are  filed  

challenging  both  the  orders  passed  by  the  single  judge  and  the  division  

bench.  

8. At the outset Mr. C.A. Sundaram, submitted that the proper course  

would be to refer the matter to a larger bench of three judges. He pointed out  

that in Orma Impex Pvt. Ltd. v. Nissai ASB PTE Ltd., (1999) 2 SCC 541, the  

same question was earlier referred to a bench of three judges of this Court.  

The Court, however, did not have the occasion to decide the case because it  

was withdrawn following a settlement between the parties. Mr. Sundaram  

submitted that though the case does not survive, the issue arising in it (which  

is  the  same  as  in  this  batch  of  cases)  continues  to  be  alive  and  hence,  

following the referral in  Orma Impex Pvt. Ltd. (which was in the form of  

‘Record of  Proceedings’  and not  an order  of  the Court!),  all  these  cases  

should be referred for hearing before a bench of three judges of this Court.  

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Mr. Dushyant Dave, learned senior advocate appearing for the respondents,  

in  some  of  the  cases  in  the  batch,  strongly  opposed  Mr.  Sundaram’s  

submission and contended that there was no need to refer the cases to any  

larger bench.  

9. In Orma Impex Pvt. Ltd., the Delhi High Court had taken the view that  

against the order passed by a single judge of the High Court under section  

45, refusing to refer parties to arbitration, no further appeal would lie under  

section 50 of the 1996 Act. In the special  leave petition filed against the  

order of the High Court, a bench of two judges of this Court observed that  

the High Court had failed to notice section 10 of the Delhi High Court Act,  

1996 and clause 10 of the Letters Patent which applies to the Delhi High  

Court. It further observed that though the view taken by the High Court was  

supported by a  two judge bench decision  of  this  Court  in  State  of  West   

Bengal v. M/s Gourangalal Chatterjee, (1993) 3 SCC 1, which in turn had  

relied upon an earlier decision of the Court in Union of India v.  Mohindra  

Supply Co., 1962 (3) SCR 497, a contra view was taken by the Court in  

Vinita M. Khanolkar v.  Pragna M. Pai & Ors., (1998) 1 SCC 500. There,  

thus,  appeared  a  conflict  of  decisions  on the  question.  In  support  of  the  

contra view, the division bench also referred to an earlier decision by a three  

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judge bench of this  Court  in  National  Sewing Thread Co.  Ltd.  v.  James  

Chadwick and Bros. Ltd., AIR 1953 SC 357.  

10. Mr. Dave pointed out that neither the decision in Vinita M. Khanolkar  

nor the decision in National Sewing Thread Co. Ltd. was rendered under the  

provisions of the Arbitration Act; the former was in the context of section  

6(3) of the Specific Relief Act, 1963 and the latter under the Trade Marks  

Act,  1940.  He  further  submitted  that  after  the  decisions  in  Vinita  M.  

Khanolkar and the referral of Orma Impex Pvt. Ltd., a three judge bench of  

this Court in Union of India & Ors. v. Aradhana Trading Co., (2002) 4 SCC  

447, had the occasion to consider the same question, as arising in this batch  

of  cases,  though not  under the 1996 Act but  under the provisions of  the  

Arbitration Act,  1940 (hereinafter “1940 Act”). In  Aradhana Trading Co.  

the  Court  referred  to  both  the  decisions  in  Vinita  M.  Khanolkar and  in  

National Sewing Thread Co. Ltd.; the first it did not follow and the second it  

distinguished as having been rendered on a different set of provisions. Mr.  

Dave  submitted  that,  thus,  the  very  foundation  on  which  the  referral  of  

Orma Impex Pvt. Ltd. was based, no longer held good.  

11. On hearing the two sides, we are of the view that in the afore-noted  

facts and circumstances the referral of Orma Impex Pvt. Ltd. cannot be said  

to constitute a binding precedent, especially as the case that was referred no  

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longer survives. In any event we have heard the two sides at great length and  

we see no good reason why this matter should be referred to a larger bench  

and not decided by this Court. We, accordingly, proceed to do so.  

12. The question regarding the availability of an appeal under the relevant  

clause of the Letters Patent has engaged the attention of this Court from time  

to time under different circumstances and in cases arising under different  

Acts. We take note of some of the cases here that were brought to our notice  

by the two sides.

13. In National Sewing Thread Co. Ltd., this Court held that the judgment  

of a learned single judge of the Bombay High Court, on an appeal preferred  

under section 76 of the Trade Marks Act was subject to appeal under clause  

15 of the Letters Patent of that High Court. The Court noted the material part  

of clause 15 of the Letters Patent of the High Court and section 76 (1) of the  

Trade Marks Act and observed:

“The  Trade  Marks  Act  does  not  provide  or  lay  down  any  procedure for the future conduct or career of that appeal in the  High Court, indeed S.77 of the Act provides that the High Court  can if it  likes make rules in the matter.  Obviously after the  appeal had reached the High Court it has to be determined  according  to  the  rules  of  practice  and  procedure  of  that  Court and in accordance with the provisions of the charter  under which that Court is constituted and which confers on  it power in respect to the method and manner of exercising  that jurisdiction. The rule is well settled that when a statute  directs  that  an  appeal  shall  lie  to  a  Court  already  

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established,  then  that  appeal  must  be  regulated  by  the  practice and procedure of that Court.”

                                                                             (emphasis supplied)

14. Taking  support  for  its  view  from  the  decisions  in  (i)  National   

Telephone Co. Ltd. v.  Postmaster-General, (1913) AC 546, (ii)  Adaikappa  

Chettiar v. Chandresekhara Thevar, AIR 1948 PC 12 and (iii) Secy. of State  

for India v. Chellikani Rama Rao, AIR 1916 PC 21, the decision in National   

Sewing Thread Co. Ltd. further observed:

“Section 76, Trade Marks Act confers a right of appeal to the  High Court and says nothing more about it. That being so, the  High Court being seized as much of the appellate jurisdiction  conferred by S.76 it has to exercise that jurisdiction in the same  manner as it exercises its other appellate jurisdiction and when  such jurisdiction is exercised by a single Judge, his judgment  becomes  subject  to  appeal  under  Cl.15  of  the  Letters  Patent  there being nothing to the contrary in the Trade Marks Act.”

15. The Court held that there was nothing in the provisions of section 77  

of  the  Trade  Marks  Act  that  would  debar  the  High  Court  from hearing  

appeals under section 76,  according to the Rules under which all other  

appeals  are  heard  or  from  framing  Rules  for  the  exercise  of  that  

jurisdiction under section 108, Government of India Act, 1915, for hearing  

those appeals by single judges or by division benches. It also negated the  

submission  that  the  judgment  of  the  learned  single  judge  would  not  be  

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subject to an appeal under clause 15 of the Letters Patent because it was not  

delivered pursuant to section 108, Government of India Act.  

16. In Vinita M. Khanolkar, a bench of two judges of this Court held that  

notwithstanding  the  bar  of  sub-section  (3),  an order  passed  by a  learned  

single judge of the High Court under section 6 of the Specific Relief Act  

would nevertheless be subject to appeal under clause 15 of the Letters Patent  

of the Bombay High Court. In Vinita M. Khanolkar, this Court put the power  

of  the  High Court  under  the  Letters  Patent  at  the  level  of  constitutional  

power of the High Court and went on to observe as follows:

“3. 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.”

17. As noted above, Vinita M. Khanolkar, was considered in a later three  

judge bench decision in Aradhana Trading Co. One may not go so far as to  

say that Aradhana Trading Co. disapproved Vinita M. Khanolkar wholly but  

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it surely took the opposite view on the question in the context of section 39  

of the Arbitration Act, 1940.

18. In Sharda Devi v. State of Bihar, (2002) 3 SCC 705, a bench of three  

judges of this Court examined the question whether a Letters Patent Appeal  

is  maintainable  against  the judgment and decree of a single judge of the  

High  Court  passed  in  an  appeal  preferred  under  section  54  of  the  Land  

Acquisition Act, 1894. A bench of two judges before which the case was  

earlier put up noticed a conflict of decision on the question. In Baljit Singh  

v.  State of  Haryana,  bench of  two judges of the Court  had held that  no  

Letters Patent Appeal is maintainable against the judgment of a single judge  

of the High Court on an appeal under section 54 of the Land Acquisition  

Act,  whereas in  Basant Kumar v.  Union of India,  (1996) 11 SCC 542, a  

bench of three judges, without adverting to the decision in Baljit Singh, held  

that  such  an  appeal  is  maintainable.  The  two  judge  bench,  accordingly,  

referred the case for hearing before a bench of three judges. The three judge  

bench affirmed the decision in  Basant Kumar. It noted that the decision in  

Baljit Singh was based on concession made in light of an earlier decision of  

this Court in  South Asia Industries (P) Ltd.  v.  S.B. Sarup Singh, (1965) 2  

SCR 756. The decision in  South Asia Industries was in a case under the  

Delhi Rent Control Act, 1958. In Sharda Devi, the Court pointed out that in  

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South Asia Industries,  the Court had examined sections 39 and 43 of the  

Delhi Rent Control Act and held that a combined reading of the two sections  

showed that an order passed by the High Court in an appeal under section 39  

was to be final. It was held that the provision of finality was intended to  

exclude any further appeal. This decision was, thus, based on interpretation  

of sections 39 and 43 of the Delhi Rent Control Act. Section 54 of the Land  

Acquisition Act, has no similarity with sections 39 and 43 of the Delhi Rent  

Control Act. Hence, the decision in South Asia Industries had no relevance  

to decide the question whether a letters patent appeal is maintainable against  

the  judgment  passed  by  a  single  judge  under  section  54  of  the  Land  

Acquisition  Act.  In  regard  to  the  Letters  Patent  jurisdiction  of  the  High  

Court,  this  Court  in  Sharda  Devi made  the  following  observation  in  

paragraph 9:

“9. 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  excludes  an  appeal  under  the Letters Patent.”

19. Referring  to  section  54  of  the  Land  Acquisition  Act,  the  Court  

concluded as follows:

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“14. …  Section 26 of the said Act provides that every award  shall be a decree and the statement of grounds of every award  shall be a judgment. By virtue of the Letters Patent "an appeal"  against the judgment of a Single Judge of the High Court would  lie to a Division Bench.  Section 54 of the said Act does not  exclude an appeal under the Letters Patent. The word "only"  occurring  immediately  after  the  non  obstante  clause  in  Section 54  refers  to  the  forum of  appeal.  In  other  words,  it  provides that the appeal will be to the High Court and not to  any other court e.g. the District  Court. The term "an appeal"  does not restrict it to only one appeal in the High Court. The  term "an appeal"  would take  within  its  sweep  even a  letters  patent appeal. The decision of the Division Bench rendered in a  letters  patent  appeal  will  then  be  subject  to  appeal  to  the  Supreme Court.  Read in any other  manner  there  would be a  conflict  between  Section 54  and  the  provision  of  a  Letters  Patent. It is settled law that if there is a conflict, attempt should  be made to harmoniously construe the provisions.”

20. In Subal Paul v. Malina Paul & Anr., (2003) 10 SCC 361, a bench of  

three judges of this  Court examined the question whether a letters  patent  

appeal would lie against the judgment of a single judge of a High Court on  

an  appeal  filed  under  section  299  of  the  Indian  Succession  Act,  1925.  

Arguing against  the  maintainability  of  a  letters  patent  appeal  against  the  

judgment  of  the  single  judge  it  was  contended  that  the  rejection  of  the  

application for probate by the district judge did not give rise to any decree.  

Hence, an appeal against such an order would be one under section 104 of  

the Civil Procedure Code and a further appeal would, therefore, be barred  

under  sub-section  (2)  of  section  104.  This  Court  did  not  accept  the  

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submission.  It  held  that  the  appeal  against  an  order  of  the  district  judge  

would be under section 299 of the Indian Succession Act. Section 104 of the  

Code simply recognizes appeals provided under special statutes; it does not  

create a right of appeal as such. Consequently, it does not bar any further  

appeal also. As regards the nature of an appeal under the Letters Patent, the  

decision in Subal Paul in paragraphs 21 and 22, observed as follows:

“21.  If  a  right  of  appeal  is  provided  for  under  the  Act,  the  limitation  thereof  must  also  be  provided  therein.  A  right  of  appeal  which is  provided under  the  Letters  Patent  cannot  be  said to be restricted.  Limitation of a right of appeal, in the  absence  of  any  provision  in  a  statute  cannot  be  readily  inferred. It is now well-settled that the appellate jurisdiction  of a superior court is not taken as excluded simply because  the  subordinate  court  exercises  its  special  jurisdiction. In  G.P. Singh's Principles of Statutory Interpretation, it is stated:

"The  appellate  and  revisional  jurisdiction  of  superior  courts  is  not  taken  as  excluded  simply  because  the  subordinate  court  exercises  a  special  jurisdiction.  The  reason is that when a special Act on matters governed by  that Act confers a jurisdiction to an established court, as  distinguished  from  a  persona  designata,  without  any  words  of  limitation,  then,  the  ordinary  incident  of  procedure  of  that  court  including  any  general  right  of  appeal or revision against its decision is attracted."

 22. But  an  exception  to  the  aforementioned  rule  is  on  matters where the special Act sets out a self-contained code,  the  applicability  of  the  general  law  procedure  would  be  impliedly excluded. [See  Upadhyaya Hargovind Devshanker  v. Dhirendrasinh Virbhadrasinhji Solanki (1988) 2 SCC 1]”

(emphasis supplied)

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21. In  paragraph  32  of  the  judgment,  this  Court  further  observed  as  

follows:

“32. 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.”

 22. In P.S. Sathappan v. Andhra Bank Ltd. & Ors., (2004) 11 SCC 672, a  

constitution bench of this Court once again extensively considered the nature  

of the Letters Patent jurisdiction of the High Court, and the circumstances in  

which it would be available and those under which it would be ousted. The  

question that was referred to the Constitution Bench was: what would be  

“the  effect  of  the  provisions  of  section  104(2)  of  the  Code  of  Civil  

Procedure, 1908 (hereinafter “CPC”) vis-à-vis clause 15 of the Letters Patent  

(of  the  Madras  High Court)”?  An application  for  setting  aside  the  court  

auction-sale was dismissed by the execution court.  An appeal  against the  

order  came  to  the  High  Court  and  it  was  dismissed  by  a  single  judge.  

Against the order of the single judge, a letters patent appeal was filed. The  

question of maintainability of the appeal was examined by a full bench of  

the High Court and the intra-court appeal to the division bench was held to  

be not maintainable in view of the provisions of section 104(2) of CPC. A  

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Constitution Bench of this Court, however, reversed the decision of the full  

bench of the High Court and by a majority of 3:2 held that the letters patent  

appeal was perfectly maintainable.

23. P.S. Sathappan is actually an authority on the interplay of section 104  

of  the Code of Civil  Procedure and the Letters  Patent  jurisdiction  of the  

High Court. The majority judgment went into the history of the matter and  

pointed out that under the Civil Procedure Codes of 1877 and 1882 there  

was a divergence of opinion among the different High Courts on the point  

whether  the  finality  attached  to  orders  passed  under  section  588  

(corresponding to section 104 of the present Code) precluded any further  

appeals, including a letters patent appeal. The question, then, came up before  

the Privy Council in the case of Hurrish Chunder Chowdry v. Kali Sundari  

Debia, ILR (1882) 9 Cal. 482 ( PC). But the decision of the Privy Council,  

rather than settling the issue gave rise to further conflicting decisions by  

different  High Courts  in  the country.  The Bombay,  Calcutta  and Madras  

High Courts held that section 588 did not take away the right of appeal given  

under the Letters Patent. On the other hand, the Allahabad High Court took a  

different view and held that a letters patent appeal was barred under section  

588 of the Code. In view of this conflict of views, the legislature stepped in  

and amended the law. It introduced section 4 and section 104 in the Code.  

18

Having,  thus,  put  the  controversy  in  the  historical  perspective,  the  Court  

referred  to  sections  4  and  104  of  the  Code  and  made  the  following  

observation in paragraph 6 of the judgment:

“To be immediately noted that now the legislature provides that  the provision of this Code will not affect or limit special law  unless  specifically  excluded.  The  legislature  also  simultaneously saves, in section 104(1), appeals under "any  law for the time being in force". These would include letters  patent appeals.”

       (emphasis supplied )

24. The above is really the kernel of the decision in  P.S. Sathappan and  

the rest of the judgment is only an elucidation of this point.

25. In  P. S. Sathappan the constitution bench considered in some detail  

the  1962  decision  by  a  bench  of  four  judges  of  the  Court  in  Mohindra  

Supply Co. (supra)  in which the legislative history of section 104 of the  

Code was traced out in detail and it was shown that by virtue of the saving  

clause in section 4 and the express language of section 104 that saved an  

appeal as provided by any other law for the time being in force, a letters  

patent appeal was not hit by the bar of sub-section (2) of section 104 of the  

Code.  [Mohindra Supply Co., however, was a case under section 39 of the  

1940 Act, which did not contain any provision similar to section 4 of the  

Code and hence, in that case the Court held that the finality attached by sub-

19

section (2) to an order passed under sub-section (1) of section 39 barred any  

further appeal, including a letters patent appeal.]  

26. In P.S. Sathappan, on a consideration of a number of earlier decisions,  

the Constitution Bench concluded that till 1996, the unanimous view of all  

courts was that section 104(1) CPC specifically saved letters patent appeals  

and the  bar  under  section  104(2)  did  not  apply  to  letters  patent  appeals.  

Thereafter, there were two decisions in deviation from the accepted judicial  

view, one by a bench of two judges of this Court in  Resham Singh Pyara  

Singh v. Abdul Sattar, (1996) 1 SCC 49 and the other by a bench of three  

judges  of  this  Court  in  New  Kenilworth  Hotel  (P)  Ltd.  v.  Orissa  State  

Finance Corpn., (1997) 3 SCC 462.  P.S. Sathappan, overruled both these  

decisions and declared that Resham Singh Pyara Singh and New Kenilworth   

Hotel (P) Ltd. laid down wrong law. It further pointed out that even after the  

aforementioned two decisions this Court had continued to hold that a Letters  

Patent  Appeal  is  not  affected  by  the  bar  of  section  104(2)  CPC.  In  this  

connection, it referred to Vinita M. Khanolkar (supra), under section 6 of the  

Specific Relief Act, Chandra Kanta Sinha v. Oriental Insurance Co. Ltd. &  

Ors.,   (2001) 6 SCC 158, under section 140 of the Motor Vehicles  Act,  

1988,  Sharda Devi (supra), under section 54 of the Land Acquisition Act  

and  Subal Paul (supra),  under section 299 of the Indian Succession Act,  

20

1925 and came to the conclusion that the consensus of judicial opinion has  

been that section 104(1) CPC expressly saves the letters patent appeal and  

the bar under section 104(2)  CPC does not apply to letters patent appeals. In  

paragraph 22 of the judgment, the Court observed as follows:

“22…. The view has been that a letters patent appeal cannot be  ousted  by  implication  but  the  right  of  an  appeal  under  the  Letters Patent can be taken away by an express provision in an  appropriate legislation. The express provision need not refer to  or  use  the  word  "letters  patent"  but  if  on  a  reading  of  the  provision it is clear that all further appeals are barred then even  a letters patent appeal would be barred.”

27. Further,  analysing  the two sub-sections of section 104(2) along with  

section  4  CPC,  this  Court  in  paragraph  30 of  the  judgment  observed as  

follows:

“30…. Section 104 must be read as a whole and harmoniously.  If the intention was to exclude what is specifically saved in sub- section (1), then there had to be a specific exclusion. A general  exclusion of  this  nature  would not  be sufficient.  We are  not  saying that a general exclusion would never oust a letters patent  appeal.  However,  when  section  104(1)  specifically  saves  a  letters patent appeal then the only way such an appeal could be  excluded is by express mention in section 104(2) that a letters  patent appeal is also prohibited. . ….”

28. Mr. Sundaram heavily relied upon this decision.   

29. The decisions noticed so far lay down certain broad principles that  

may be stated as follows:

21

1. Normally, once an appeal reaches the High Court it has to be  

determined according to the rules of practice and procedure  

of the High Court and in accordance with the provisions of  

the charter under which the High Court is constituted and  

which  confers  on  it  power  in  respect  to  the  method  and  

manner of exercising that power.

2. When a statute merely directs that an appeal shall lie to a  

court already established then that appeal must be regulated  

by the practice and procedure of that court.

3. The  High  Court  derives  its  intra-court  appeal  jurisdiction  

under the charter by which it was established and its powers  

under  the  Letters  Patent  were  recognized  and  saved  by  

section 108 of the Government of India Act, 1915, section  

223 of the Government of India Act, 1935 and finally, by  

Article  225 of  the Constitution of  India.  The High Court,  

therefore, cannot be divested of its Letters Patent jurisdiction  

unless provided for expressly or by necessary intendment by  

some special statute.

4. If  the  pronouncement  of  the  single  judge  qualifies  as  a  

“judgment”, in the absence of any bar created by a statute  

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either  expressly  or  by  necessary  implication,  it  would  be  

subject  to  appeal  under  the  relevant  clause  of  the  Letters  

Patent of the High Court.

5. Since  section  104(1)  CPC  specifically  saves  the  letters  

patent  appeal  it  could  only  be  excluded  by  an  express  

mention  in  section  104(2).  In  the  absence of  any express  

mention  in  section  104(2),  the  maintainability  of  a  letters  

patent appeal is saved by virtue of section 104(1).  

6. Limitation of a right of appeal in absence of any provision in  

a  statute  cannot  be  readily  inferred.  The  appellate  

jurisdiction of a superior court cannot be taken as excluded  

simply  because  a  subordinate  court  exercises  its  special  

jurisdiction.

7. The  exception  to  the  aforementioned  rule  is  where  the  

special Act sets out a self-contained code and in that event  

the  applicability  of  the  general  law  procedure  would  be  

impliedly excluded. The express provision need not refer to  

or use the word “letters patent” but if on a reading of the  

provision it is clear that all further appeals are barred then  

even a letters patent appeal would be barred.

23

30. These  general  principles  are  culled  out  from the  decisions  of  this  

Court  rendered under section 104 of the CPC and various other Acts,  as  

noted  above.  But  there  is  another  set  of  decisions  of  this  Court  on  the  

question under consideration rendered in the context of section 39 of the  

1940 Act. Section 39 of the erstwhile Act contained the provision of appeal  

and 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 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.”

24

[Insofar  as  relevant  for  the  present,  section  37  of  the  1996 Act,  is  very  

similar to section 39 of the previous Act as quoted above.]

31. In Mohindra Supply Co., a bench of four judges of this Court held that  

a letters patent appeal against an order passed by a single judge of the High  

Court on an appeal under section 39(1) of the 1940 Act was barred in terms  

of sub-section (2) of section 39. This decision is based on the bar against  

further appeals as contained in sub-section (2) of section 39 of the 1940 Act  

and, therefore, it  may not have a direct bearing on the question presently  

under consideration.

32. More  to  the  point  are  two  later  decisions.  In  M/s  Gourangalal   

Chatterjee, a bench of two judges of this Court held that an order, against  

which no appeal would lie under section 39(1) of the 1940 Act, could not be  

taken in appeal before the division bench of the High Court under its Letters  

Patent. The same view was reaffirmed by a bench of three judges of this  

Court in Aradhana Trading Co.

33. In regard to these two decisions, Mr. Sundaram took the position that  

both M/s Gourangalal Chatterjee and Aradhana Trading Co. were rendered  

on section 39 of the 1940 Act, the equivalent of which is section 37 of the  

1996 Act. In view of the two decisions, he conceded that in the event an  

order was not appealable under section 37(1) of the 1996 Act, it would not  

25

be  subject  to  appeal  under  the  Letters  Patent  of  the  High  Court.  He,  

however, referred to section 50 of the 1996 Act, which is as follows:

“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 authorised 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.”

34. Mr.  Sundaram submitted  that  section  50,  unlike  section  39  of  the  

previous Act  and section 37 of  the current  Act does not  have the words  

“(and from no others)” and that, according to him, made all the difference.  

He contended that the omission of the words in parenthesis was significant  

and it clearly pointed out that unlike section 37, even though an order was  

not  appealable under section 50,  it  would be subject  to appeal  under the  

Letters Patent of the High Court. At any event the decisions rendered under  

section 39 of the 1940 would have no application in a case relating to section  

50 of the 1996 Act.

35. Mr. Dave, in reply submitted that the words “(and from no other)”  

occurring in section 39 of the 1940 Act and section 37 of the 1996 Act were  

actually superfluous and seen, thus, there would be no material difference  

between the provisions of section 39 of the 1940 Act or section 37 of the  

26

1996 Act and section 50 of the 1996 Act and all the decisions rendered on  

section 39 of the 1940 Act will apply with full force to cases arising under  

section 50 of the 1996 Act.

36. The use of round brackets for putting words in parenthesis is not very  

common  in  legislation  and  this  reminds  us  of  the  painful  lament  by  

Meredith, J. of the Patna High Court, who in 1948 dealing with a case said  

that “the 1940 Act contains examples of bad drafting which it would be hard  

to beat”.

37.    According to the New Oxford Dictionary of English,  1998 edition,  

brackets are used to enclose words or figures so as to separate them from  

the context.  The Oxford Advanced Learner’s Dictionary, Seventh edition  

defines “bracket” to mean “either of a pair of marks, ( ) placed around extra  

information in a piece of writing or part of a problem in mathematics”.  The  

New Oxford Dictionary of English, 1998 edition gives the meaning and use  

of parenthesis as:  

“Parenthesis—noun  (pl.  parentheses)  a  word,  clause,  or  sentence  inserted  as an explanation  or  afterthought  into  a  passage  which  is  grammatically  complete  without  it,  in  writing usually marked off  by brackets, dashes, or commas.

- (usu. Parentheses) a pair of round brackets ( ) used to include  such a word, clause, or sentence.”   

27

38. The Oxford Advanced Learner’s Dictionary, Seventh edition, defines  

the meaning of parenthesis as:  

“a word, sentence,  etc.  that is  added to a speech or piece of  writing,  especially  in  order  to  give  extra  information.  In  writing,  it  is  separated  from rest  of  the  text  using  brackets,  commas or DASHES.”  

39. The  Complete  Plain  Words  by  Sir  Ernest  Gowers,  1986  revised  

edition  by  Sidney  Greenbaum  and  Janet  Whitcut,  gives  the  purpose  of  

parenthesis as follows:

“Parenthesis

The  purpose  of  a  parenthesis  is  ordinarily  to  insert  an  illustration,  explanation,  definition,  or  additional  piece  of  information of any sort  into a sentence that is logically and  grammatically  complete  without  it.  A  parenthesis  may  be  marked  off  by  commas,  dashes  or  brackets.  The  degree  of  interruption  of  the  main  sentence  may vary  from the  almost  imperceptible  one of  explanatory  words in  apposition,  to the  violent one of a separate sentence complete in itself.”  

40. The  Merriam  Webster  Online  Dictionary  defines  parenthesis  as  

follows:

“1  a : an amplifying or explanatory word, phrase, or sentence  inserted  in  a  passage  from  which  it  is  usually  set  off  by  punctuation b : a remark or passage that departs from the theme  of a discourse : digression   2: interlude, interval   3: one  or  both of  the  curved  marks (  )  used  in  writing  and  printing  to  enclose  a  parenthetical  expression  or  to  group  a  symbolic unit in a logical or mathematical expression”

28

41. The  Law  Lexicon,  The  Encyclopaedic  Law  Dictionary  by  P.  

Ramanatha Aiyar, 2000 edition, defines parenthesis as under:

“Parenthesis.  a parenthesis is defined to be an explanatory or  qualifying clause,  sentence,  or  paragraph,  inserted in  another  sentence,  or  in  course  of  a  longer  passage,  without  being  grammatically connected with it. (Cent. Dist.)

PARENTHESIS is used to limit, qualify or restrict the meaning  of  the  sentence  with  which  it  is  connected,  and  it  may  be  designated by the use of commas, or by a dash, or by curved  lines or brackets [53 Fed.81 (83); 3C, CA 440].”

42. Having regard to the grammatical  use of brackets or parentheses, if  

the words, “(and from no others)” occurring in section 39 of the 1940 Act or  

section 37 of the 1996 Act are viewed as ‘an explanation or afterthought’ or  

extra information separate from the main context, then, there may be some  

substance  in  Mr.  Dave’s  submission  that  the  words  in  parentheses  are  

surplusage and in essence the provisions of section 39 of the 1940 Act or  

section 37 of  the 1996 Act are the same as section 50 of the 1996 Act.  

Section 39 of the 1940 Act says no more and no less than what is stipulated  

in section 50 of the 1996 Act.  

43. But there may be a different reason to contend that section 39 of the  

1940 Act or  its  equivalent  section 37 of the 1996 Act are fundamentally  

different from section 50 of the 1996 Act and hence, the decisions rendered  

29

under section 39 of the 1940 Act may not have any application to the facts  

arising under section 50 of the 1996 Act.

44. But for that we need to take a look at the basic scheme of the 1996  

Act  and  its  relevant  provisions.  Before  the  coming  into  force  of  the  

Arbitration and Conciliation Act, 1996 with effect from August 16, 1996,  

the law relating to domestic arbitration was contained in the Arbitration Act,  

1940, which in turn was brought in place of the Arbitration Act, 1899. Apart  

from the Arbitration Act 1940, there were two other enactments of the same  

genre. One called the Arbitration (Protocol and Convention) Act, 1937 (for  

execution  of  the  Geneva  Convention  Awards)  and  the  other  called  the  

Foreign Awards (Recognition and Enforcement) Act, 1961 (for enforcement  

of the New York Convention awards).  

45. The  aforesaid  three  Acts  were  replaced  by  the  Arbitration  and  

Conciliation Act, 1996, which is based on the United Nations Commission  

on International Trade Law (UNCITRAL) Model and is broadly compatible  

with the “Rules of Arbitration of the International Chamber of Commerce”.  

The Arbitration and Conciliation Act, 1996 that has repealed the Arbitration  

Act, 1940 and also the Acts of 1937 and 1961, consolidates and amends the  

law relating  to  domestic  arbitration,  international  commercial  arbitration,  

enforcement  of  foreign  arbitral  awards  and  defines  the  law  relating  to  

30

conciliation  and  provides  for  matters  connected  therewith  and  incidental  

thereto taking into account the UNCITRAL MODEL law and Rules.

46. The  Statement  of  Objects  and  Reasons  of  the  Arbitration  and  

Conciliation Act, 1996 reads as under:

“Statement of Objects and Reasons

The law of arbitration in India is at present substantially  contained  in  three  enactments,  namely,  The  Arbitration  Act,  1940, The Arbitration (Protocol and Convention) Act, 1937 and  The Foreign Awards (Recognition and Enforcement) Act, 1961.  It is widely felt that the 1940 Act, which contains the general  law of arbitration, has become outdated. The Law Commission  of India, several representative bodies of trade and industry and  experts in the field of arbitration have proposed amendments to  this  Act  to  make  it  more  responsive  to  contemporary  requirements. It is also recognised that our economic reforms  may  not  become  fully  effective  if  the  law  dealing  with  settlement  of  both  domestic  and  international  commercial  disputes  remains  out  of  tune  with  such  reforms.  Like  arbitration,  conciliation  is  also  getting  increasing  worldwide  recognition as an instrument for settlement of disputes. There  is, however, no general law on the subject in India.

2. The United Nations Commission on International Trade Law  (UNCITRAL) adopted in 1985 the Model Law on International  Commercial Arbitration. The General Assembly of the United  Nations  has  recommended  that  all  countries  give  due  consideration to the said Model Law, in view of the desirability  of uniformity of the law of arbitral procedures and the specific  needs  of  international  commercial  arbitration  practice.  The  UNCITRAL also adopted in 1980 a set of Conciliation Rules.  The General Assembly of the United Nations has recommended  the use of these Rules in cases where the disputes arise in the  context  of  international  commercial  relations  and  the  parties  seek  amicable  settlement  of  their  disputes  by  recourse  to  conciliation. An important feature of the said UNCITRAL  

31

Model  Law  and  Rules  is  that  they  have  harmonised  concepts  on arbitration and conciliation of  different  legal  systems of the world and thus contain provisions which are  designed for universal application.

3. Though the UNCITRAL Model Law and Rules are intended  to  deal  with  international  commercial  arbitration  and  conciliation, they could, with appropriate modifications, serve  as  a  model  for  legislation  on  domestic  arbitration  and  conciliation. The present Bill seeks to consolidate and amend  the  law  relating  to  domestic  arbitration,  international  commercial arbitration, enforcement of foreign arbitral awards  and  to  define  the  law  relating  to  conciliation,  taking  into  account the said UNCITRAL Model Law and Rules.

4. The main objectives of the Bill are as under:- (i) to comprehensively cover international and commercial  

arbitration and conciliation as also domestic  arbitration  and conciliation;

(ii) to make provision for an arbitral procedure which is fair,  efficient and capable of meeting the needs of the specific  arbitration;

(iii) to provide that the arbitral tribunal gives reasons for its  arbitral award;

(iv) to  ensure  that  the  arbitral  tribunal  remains  within  the  limits of its jurisdiction;

(v) to  minimise  the  supervisory  role  of  courts  in  the  arbitral process;

(vi) to  permit  an  arbitral  tribunal  to  use  mediation,  conciliation  or  other  procedures  during  the  arbitral  proceedings to encourage settlement of disputes;

(vii) to provide that every final arbitral award is enforced  in the same manner as if it were a decree of the court;

(viii) to  provide  that  a  settlement  agreement  reached  by the  parties as a result of conciliation proceedings will have  the same status and effect as an arbitral award on agreed  terms  on  the  substance  of  the  dispute  rendered  by  an  arbitral tribunal; and

(ix) to provide that, for purposes of enforcement of foreign  awards, every arbitral award made in a country to which  

32

one  of  the  two  international  Conventions  relating  to  foreign arbitral awards to which India is a party applies,  will be treated as a foreign award.  

5. The Bill seeks to achieve the above objects.”         (emphasis supplied)

47. The  Preamble  of  the  Arbitration  and  Conciliation  Act,  1996  is  as  

follows:

“PREAMBLE

WHEREAS  the  United  Nations  Commission  on  International  Trade  Law  (UNCITRAL)  has  adopted  the  UNCITRAL  Model  Law  on  International  Commercial  Arbitration in 1985;       

AND WHEREAS the General Assembly of the United  Nations  has  recommended  that  all  countries  give  due  consideration to the said Model Law, in view of the desirability  of uniformity of the law of arbitral procedures and the specific  needs of international commercial arbitration practice;       

AND  WHEREAS  the  UNCITRAL  has  adopted  the  UNCITRAL Conciliation Rules in 1980;       

AND WHEREAS the General Assembly of the United  Nations has recommended the use of the said Rules in cases  where  a  dispute  arises  in  the  context  of  international  commercial  relations  and  the  parties  seek  an  amicable  settlement of that dispute by recourse to conciliation;       

AND WHEREAS the said Model Law and Rules make  significant contribution to the establishment of a unified legal  framework  for  the  fair  and  efficient  settlement  of  disputes  arising in international commercial relations;       

33

AND WHEREAS it is expedient to make law respecting  arbitration and conciliation,  taking into account the aforesaid  Model Law and Rules;”

48. The new Act is a loosely integrated version of the Arbitration Act,  

1940, Arbitration (Protocol and Convention) Act, 1937 and Foreign Awards  

(Recognition and Enforcement) Act, 1961. It actually  consolidates amends  

and  puts  together  three  different  enactments.  But  having  regard  to  the  

difference  in  the  object  and  purpose  and  the  nature  of  these  three  

enactments,  the  provisions  relating  thereto  are  kept  separately.  A  mere  

glance  at  the  1996  Act  is  sufficient  to  show that  under  its  scheme  the  

provisions relating to the three enactments  are kept  separately  from each  

other. The 1996 Act is divided into four parts and it has three schedules at its  

end.  Part  I  has  ten  chapters  that  contain  provisions  governing  domestic  

arbitration and international commercial arbitration. Part II has two chapters;  

Chapter I contains provisions relating to the New York Convention Awards  

and  Chapter  II  contains  provisions  relating  to  the  Geneva  Convention  

Awards. Part III of the Act has provisions concerning conciliation. Part IV  

has the supplementary provisions such as the power of the High Court to  

make rules (section 82), provision for removal of difficulties (section 83),  

and the power to make rules (section 84). At the end there are two repeal and  

saving sections. Section 85 repeals the three enactments referred to above,  

34

subject to the appropriate saving clause and section 86 repeals Ordinance 27  

of 1996, the precursor of the Act, subject to the appropriate saving clause.  

Of the three schedules, the first is related to Part II, Chapter I, i.e., the New  

York Convention Awards and the second and the third to Chapter II, i.e., the  

Geneva Convention Awards.

49. There is a certain similarity between the provisions of Chapters I and  

II of Part II but Part I of the Act is vastly different from Chapters I and II of  

Part II of the Act. This is quite understandable too since Part II deals only  

with enforcement of foreign awards (Chapter I, of New York Convention  

Awards and Chapter II, of Geneva Convention Awards) while Part I of the  

Act deals with the whole gamut of law concerning domestic arbitration and  

international commercial arbitration. It has, therefore, a very different and  

much larger framework than the two chapters in Part II of the Act.

50. Part  I  has ten chapters.  Chapter  I  begins with definition clauses in  

section 2 that defines, amongst other terms and expressions, “arbitration”,  

“arbitration agreement”, “arbitral award”, etc. Chapter I also contains some  

“General Provisions” (sections 3-6). Chapter II contains provisions relating  

to “Arbitration Agreement” (sections 7-9). Chapter III contains provisions  

relating to “Composition of Arbitral Tribunal” (sections 10-15). Chapter IV  

deals with the “Jurisdiction of Arbitral Tribunals” (sections 16-17). Chapter  

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V  lays  down  provisions  concerning  “Conduct  of  Arbitral  Proceedings”  

(sections  18-27).  Chapter  VI  deals  with  “Making of  Arbitral  Award and  

Termination  of  Proceedings”  (sections  28-33).  Chapter  VII  has  only  one  

section,  i.e.,  section 34 that  provides  “Recourse against  Arbitral  Award”.  

Chapter  VIII  deals  with  “Finality  and  Enforcement  of  Arbitral  Awards”  

(sections 35-36). Chapter IX provides for “Appeals” (section 37 which is  

akin to section 39 of the 1940 Act). Chapter X contains the “Miscellaneous”  

provisions (sections 38-43).

51. It is also evident that Part I and Part II of the Act are quite separate  

and contain provisions that act independently in their respective fields. The  

opening words of section 2, i.e. the definition clause in Part I, make it clear  

that meanings assigned to the terms and expressions defined in that section  

are for the purpose of that part alone. Section 4 which deals with waiver of  

right to object is also specific to Part I of the Act. Section 5 dealing with  

extent of judicial intervention is also specific to Part I of the Act. Section 7  

that defines “arbitration agreement” in considerable detail also confines the  

meaning of the term to Part  I  of the Act alone. Section 8 deals with the  

power of a judicial authority to refer parties to arbitration where there is an  

arbitration  agreement  and  this  provision  too  is  relatable  to  Part  I  alone  

(corresponding provisions are independently made in sections 45 and 54 of  

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Chapter I and II, respectively of Part II). The other provisions in Part I by  

their very nature shall have no application insofar as the two chapters of Part  

II are concerned.

52. Once it is seen that Part I and Part II of the Act are quite different in  

their object and purpose and the respective schemes, it naturally follows that  

section  37  in  Part  I  (analogous  to  section  39  of  the  1940  Act)  is  not  

comparable to section 50 in Part II of the Act. This is not because, as Mr.  

Sundaram contends section 37 has the words in parentheses “and from no  

others” which are not to be found in section 50 of the Act. Section 37 and  

section 50 are not comparable because they belong to two different statutory  

schemes. Section 37 containing the provision of appeal is part of a much  

larger framework that, as seen above, has provisions for the complete range  

of  law  concerning  domestic  arbitration  and  international  commercial  

arbitration. Section 50 on the other hand contains the provision of appeal in  

a much limited framework, concerned only with the enforcement of New  

York  Convention  awards.  In  one  sense,  the  two  sections,  though  each  

containing the appellate provision belong to different statutes.  

53. Having come to this conclusion, it  would appear that the decisions  

rendered by the Court on the interplay between section 39 of the 1940 Act  

and  the  Letters  Patent  jurisdiction  of  the  High  Court  shall  have  no  

37

application  for  deciding  the  question  in  hand.  But  that  would  be  only  a  

superficial view and the decisions rendered under section 39 of the 1940 Act  

may still give the answer to the question under consideration for a very basic  

and fundamental reason.  

54. However, before going into that it will be useful to take another look  

at the provisions of Chapter I of Part II of the Act. We have so far seen the  

provisions of Chapter I of Part II of the Act in comparison with those of Part  

I of the 1996 Act. It would also be relevant to examine it in comparison with  

the  provisions  of  its  precursor,  the  Foreign  Awards,  Recognition  and  

Enforcement Act, 1961 and to see how far the earlier Act is consolidated,  

amended and harmonised and designed for universal application.  

55. The provisions of Chapter I of Part II of the 1996 Act along with the  

provisions of the Foreign Awards, Recognition and Enforcement Act, 1961,  

insofar as relevant for the present are placed below in a tabular form:

THE FOREIGN AWARDS  (RECOGNITION AND  

ENFORCEMENT) ACT, 1961

PART II ENFORCEMENT OF CERTAIN  

FOREIGN AWARDS

CHAPTER I NEW YORK CONVENTION  

AWARDS

2.  Definition.—In  this  Act,  unless  the  context  otherwise  requires,  "foreign  

44.  Definition.—In this  Chapter,  unless  the  context  otherwise  requires,  "foreign  

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award"  means  an  award  on  differences  between  persons  arising  out  of  legal  relationships, whether contractual or not,  considered as commercial under the law  in  force  in  India,  made  on or  after  the  11th day of October, 1960 -  

(a) in pursuance of an agreement in  writing  for  arbitration  to  which  the  Convention  set  forth  in  the  Schedule applies, and  

(b) in  one  of  such  territories  as  the  Central  Government  being  satisfied  that  reciprocal  provisions have been made, may,  by  notification  in  the  Official  Gazette,  declare  to  be  territories  to  which  the  said  Convention  applies.

 3.  Stay  of  proceedings  in  respect  of  matters  to  be  referred  to  arbitration.— Notwithstanding  anything  contained  in  the Arbitration Act,  1940 (10 of 1940),  or in the Code of Civil Procedure, 1908  (5 of 1908), if any party to an agreement  to which Article II of the Convention set  forth  in  the  Schedule  applies,  or  any  person  claiming  through  or  under  him  commences any legal proceedings in any  court  against  any  other  party  to  the  agreement  or  any  person  claiming  through or under him in respect of any  matter agreed to be referred to arbitration  in  such  agreement,  any  party  to  such  legal proceedings may, at any time after  appearance  and  before  filing  a  written  statement or taking any other step in the  proceedings,  apply  to  the  court  to  stay  the  proceedings  and  the  court,  unless  satisfied  that  the  agreement  is  null  and  

award"  means  an  arbitral  award  on  differences  between persons  arising  out  of  legal  relationships,  whether  contractual  or  not,  considered  as  commercial  under  the  law  in  force  in  India, made on or after the 11th day of  October, 1960 –    

(a) in  pursuance  of  an  agreement  in  writing for arbitration to which the  Convention  set  forth  in  the  First  Schedule applies, and  

(b) in  one  of  such  territories  as  the  Central  Government,  being  satisfied that reciprocal provisions  have  been  made  may,  by  notification in the Official Gazette,  declare  to  be  territories  to  which  the said Convention applies.  

45.  Power  of  judicial  authority  to  refer  parties to arbitration.— Notwithstanding  anything  contained  in  Part I or in the Code of Civil Procedure,  1908  (5  of  1908),  a  judicial  authority,  when seized of an action in a matter in  respect  of which the parties  have made  an  agreement  referred  to  in  section  44,  shall, at the request of one of the parties  or any person claiming through or under  him,  refer  the  parties  to  arbitration,  unless it finds that the said agreement is  null and void, inoperative or incapable of  bring performed.  

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void,  inoperative  or  incapable  of  being  performed or  that  there  is  not,  in  fact,  any  dispute  between  the  parties  with  regard  to  the  matter  agreed  to  be  referred, shall make an order staying the  proceedings.

4.  Effect  of  foreign  awards.—(1)  A  foreign  award  shall,  subject  to  the  provisions of this Act, be enforceable in  India as if it were an award made on a  matter referred to arbitration in India.  

(2) Any foreign award which would be  enforceable  under  this  Act  shall  be  treated as binding for all purposes on the  persons as between whom it was made,  and may accordingly be relied on by any  of those persons by way of defence, set  off or otherwise in any legal proceedings  in India and any references in this Act to  enforcing  a  foreign  award  shall  be  construed  as  including  references  to  relying on an award.  

5. Filing of foreign award in court.—(1)  Any person interested in a foreign award  may  apply  to  any  court  having  jurisdiction over the subject-matter of the  award that the award be filed in court.  

(2) The application shall be in writing  and shall be numbered and registered as  a suit between the applicant as plaintiff  and the other parties as defendants.  

(3) The court shall direct notice to be  given  to  the  parties  to  the  arbitration,  other than the applicant, requiring them  to  show cause,  within  a  time  specified  why the award should not be filed.  

6.  Enforcement  of  foreign  award.—(1)  

46. When foreign award binding.—Any  foreign  award  which  would  be  enforceable  under  this  Chapter  shall  be  treated as binding for all purposes on the  persons as between whom it was made,  and may accordingly be relied on by any  of those persons by way of defence, set  off or otherwise in any legal proceedings  in  India  and  any  references  in  this  Chapter  to  enforcing  a  foreign  award  shall  be  construed  as  including  references to relying on an award.    47.  Evidence.—(1)  The  party  applying  for  the  enforcement  of  a foreign award  shall,  at  the  time  of  the  application,  produce before the court –    

(a) the  original  award  or  a  copy  thereof,  duly  authenticated  in  the  manner required by the law of the  country in which it was made;  

(b) the  original  agreement  for  arbitration or a duly certified copy  thereof; and  

(c) such evidence as may be necessary  to prove that the award is a foreign  award.  

 (2)  If  the  award  or  agreement  to  be  

produced  under  sub-section  (1)  is  in  a  foreign  language,  the  party  seeking  to  enforce  the  award  shall  produce  a  translation  into  English  certified  as  correct by a diplomatic or consular agent  of  the  country  to  which  that  party  belongs  or  certified  as  correct  in  such  other  manner  as  may  be  sufficient  according to the law in force in India.      Explanation.—In this section and all  

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Where  the  court  is  satisfied  that  the  foreign award is  enforceable  under this  Act, the court shall order the award to be  filed  and  shall  proceed  to  pronounce  judgment according to the award.  

(2) Upon the judgment so pronounced a  decree shall follow, and no appeal shall  lie from such decree except in so far as  the  decree  is  in  excess  of  or  not  in  accordance with the award.  

7. Conditions for enforcement of foreign  awards.— (1) A foreign award may not  be enforced under this Act-  

(a) if  the  party  against  whom  it  is  sought  to  enforce  the  award  proves  to  the  court  dealing  with  the case that-  

(i) the  parties  to  the  agreement  were under the law applicable  to  them,  under  some  incapacity,  or  the  said  agreement is not valid under  the  law to  which  the  parties  have  subjected  it,  or  failing  any indication thereon, under  the law of the country where  the award was made; or  

(ii) the  party  was  not  given  proper  notice  of  the  appointment of  the arbitrator  or  of  the  arbitration  proceedings or was otherwise  unable to present his case; or  

(iii) the  award  deals  with  questions  not  referred  or  contains decisions on matters  beyond  the  scope  of  the  agreement:  Provided  that  if  the  decisions  on  matters  

the  following  sections  of  this  Chapter,  "Court" means the principal Civil Court  of original jurisdiction in a district,  and  includes the High Court in exercise of its  ordinary  original  civil  jurisdiction,  having  jurisdiction  over  the  subject- matter of the award if the same had been  the subject-matter of a suit, but does not  include any civil court of a grade inferior  to  such  principal  Civil  Court,  or  any  Court of Small Causes.    48.  Conditions  for  enforcement  of  foreign  awards.—(1)  Enforcement  of  a  foreign  award  may  be  refused,  at  the  request  of  the  party  against  whom it  is  invoked,  only  if  that  party  furnishes  to  the court proof  that –    

(a) the  parties  to  the  agreement  referred  to  in  section  44  were,  under the law applicable to them,  under some incapacity or the said  agreement  is  not  valid  under  the  law  to  which  the  parties  have  subjected  it  or,  failing  any  indication  thereon,  under  the  law  of  the  country  where  the  award  was made; or  

(b) the party against whom the award  is  invoked  was  not  given  proper  notice  of  the  appointment  of  the  arbitrator  or  of  the  arbitral  proceedings  or  was  otherwise  unable to present his case; or  

(c) the award deals with a difference  not contemplated by or not falling  within the terms of the submission  to  arbitration,  or  it  contains  decisions  on  matters  beyond  the  

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submitted  to  arbitration  can  be  separated  from those  not  submitted,  that  part  of  the  award  which  contains  decisions  on  matters  submitted  to  arbitration  may  be enforced; or  

(iv) the  composition  of  the  arbitral  authority  or  the  arbitral procedure was not in  accordance  with  the  agreement  of  the  parties  or  failing  such  agreement,  was  not  in  accordance  with  the  law of the country where the  arbitration took place; or  

(v) the award has not yet become  binding on the parties or has  been  set  aside  or  suspended  by  a  competent  authority  of  the  country  in  which,  or  under the law of which, that  award was made; or  

(b) if the court dealing with the case  is satisfied that-  

(i) the  subject-matter  of  the  difference  is  not  capable  of  settlement  by  arbitration  under the law of India; or  

(ii) the enforcement of the award  will  be  contrary  to  public  policy.

(2) If the court before which a foreign  award  is  sought  to  be  relied  upon  is  satisfied  that  an  application  for  the  setting aside or suspension of the award  has been made to a competent authority  referred to in sub-clause (v) of clause (a)  

scope  of  the  submission  to  arbitration:  

Provided that,  if  the  decisions  on matter  submitted to arbitration  can be separated from those not so  submitted,  that  part  of  the  award  which  contains  decisions  on  matters  submitted  to  arbitration  may be enforced; or  

(d) the  composition  of  the  arbitral  authority or the arbitral procedure  was  not  in  accordance  with  the  agreement of the parties, or, failing  such  agreement,  was  not  in  accordance  with  the  law  of  the  country where the arbitration took  place; or  

(e) the  award  has  not  yet  become  binding on the parties, or has been  set  aside  or  suspended  by  a  competent authority of the country  in  which,  or  under  the  law  of  which, that award was made.  

   (2)  Enforcement  of  an arbitral  award  may  also  be  refused  if  the  Court  finds  that –  

(a) the  subject-matter  of  the  difference  is  not  capable  of  settlement by arbitration under the  law of India; or  

(b) the  enforcement  of  the  award  would  be  contrary  to  the  public  policy of India.

       Explanation.—Without prejudice to  the  generality  of  clause  (b)  of  this  section,  it  is  hereby  declared,  for  the  avoidance of any doubt, that an award is  in conflict with the public policy of India  

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of  sub-section  (1),  the  court  may,  if  it  deems  proper,  adjourn  the  decision  on  the  enforcement  of  the  award and may  also,  on  the  application  of  the  party  claiming  enforcement  of  the  award,  order the other party to furnish suitable  security.  

8. Evidence.—(1) The party applying for  the enforcement of a foreign award shall,  at the time of the application, produce-  

(a) the  original  award  or  a  copy  thereof, duly authenticated in the  manner required by the law of the  country in which it was made;  

(b) the  original  agreement  for  arbitration or a duly certified copy  thereof; and  

(c) such  evidence  as  may  be  necessary to prove that the award  is a foreign award.  

(2) If the award or agreement requiring  to be produced under sub-section (1) is  in a foreign language, the party seeking  to  enforce  the  award  shall  produce  a  translation  into  English  certified  as  correct by a diplomatic or consular agent  of  the  country  to  which  that  party  belongs  or  certified  as  correct  in  such  other  manner  as  may  be  sufficient  according to the law in force in India.  

9. Saving.—Nothing in this Act shall-  (a) prejudice  any  rights  which  any  

person  would  have  had  of  enforcing in India of any award or  of availing himself in India of any  award  if  this  Act  had  not  been  passed; or  

(b) apply  to  any award  made  on an  

if the making of the award was induced  or affected by fraud or corruption.      (3) If an application for the setting aside  or  suspension  of  the  award  has  been  made to a competent authority referred to  in clause (e) of sub-section (1) the Court  may, if it considers it proper, adjourn the  decision on the enforcement of the award  and may also, on the application of the  party claiming enforcement of the award,  order  the  other  party  to  give  suitable  security.    49.  Enforcement  of  foreign  awards.— Where  the  Court  is  satisfied  that  the  foreign  award is  enforceable  under  this  Chapter, the award shall be deemed to be  a decree of that Court.    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  authorised 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.    51.  Saving.—Nothing  in  this  Chapter  shall  prejudice  any  rights  which  any  person would have had of  enforcing in  India of any award or of availing himself  

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arbitration  agreement  governed  by the law of India.  

10.  Repeal.—The  Arbitration  (Protocol  and Convention) Act, 1937 (6 of 1937),  shall  cease to have effect  in relation to  foreign awards to which this Act applies.  

11.  Rule  making  power  of  the  High  Court.—The High Court may make rules  consistent with this Act as to-  

(a) the  filing  of  foreign  awards  and  all  proceedings  consequent  thereon or incidental thereto;  

(b) the  evidence  which  must  be  furnished  by  a  party  seeking  to  enforce a foreign award under this  Act; and  

(c) generally, all proceedings in court  under this Act.

in India of any award if this Chapter had  not been enacted.  

52. Chapter II not to apply.—Chapter II  of this Part shall not apply in relation to  foreign awards to which this Chapter  applies.

56. A comparison of the two sets of provisions would show that section  

44,  the  definition  clause  in  the  1996  Act  is  a  verbatim reproduction  of  

section 2 of the previous Act (but for the words “chapter” in place of “Act”,  

“first  schedule”  in  place  of  “schedule”  and  the  addition  of  the  word  

“arbitral” before the word “award” in section 44). Section 45 corresponds to  

section  3  of  the  previous  Act.  Section  46  is  a  verbatim reproduction  of  

section  4(2)  except  for  the  substitution  of  the  word “chapter”  for  “Act”.  

Section 47 is almost a reproduction of section 8 except for the addition of  

the words “before the court” “in sub-section (1)” and an explanation as to  

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what is meant by “court” in that section. Section 48 corresponds to section 7;  

section 49 to section 6(1) and section 50 to section 6(2). Apart from the fact  

that the provisions are arranged in a far more orderly manner, it  is to be  

noticed that the provisions of the 1996 Act are clearly aimed at facilitating  

and  expediting  the  enforcement  of  the  New  York  Convention  Awards.  

Section 3 of the 1961 Act dealing with a stay of proceedings in respect of  

matters to be referred to arbitration was confined in its application to “legal  

proceedings in any court” and the court had a wider discretion not to stay the  

proceedings  before  it.  The  corresponding  provision  in  section  45  of  the  

present  Act  has  a  wider  application  and  it  covers  an  action  before  any  

judicial  authority.  Further,  under  section  45  the  judicial  authority  has  a  

narrower discretion to refuse to refer the parties to arbitration. Under section  

4(1) of the 1961 Act, a foreign award for its enforcement was first deemed to  

be an award made on a matter referred to arbitration in India. Section 46 of  

the present Act dispenses with the provision of sub-section (1) of section 4  

and resultantly a foreign award is enforceable in its own right. Section 47 is  

almost  a  reproduction  of  section  8  except  for  the  addition  of  the  words  

“before the court” in sub-section (1) and an explanation as to what is meant  

by “court” at the end of the section. Section 49 corresponds to section 6(1)  

and section 50 to section 6(2). It is however, a comparison of section 6 of the  

45

1961 Act with section 49 of the present Act that would be of interest to us  

and that provides a direct answer to the question under consideration. As the  

comparison of the two sections is of some importance, the two sections are  

once again reproduced here:

The Foreign Awards (Recognition and Enforcement) Act, 1961

“6.  Enforcement  of  foreign  award.—(1)  Where  the  court  is  satisfied that the foreign award is enforceable under this Act,  the court shall order the award to be filed and shall proceed to  pronounce judgment according to the award.  

(2) Upon the judgment so pronounced a decree shall follow,  and no appeal shall lie from such decree except in so far as the  decree is in excess of or not in accordance with the award.”

          The Arbitration and Conciliation Act, 1996

“49.  Enforcement  of  foreign  awards.—Where  the  Court  is  satisfied  that  the  foreign  award  is  enforceable  under  this  Chapter,  the  award  shall  be  deemed  to  be  a  decree  of  that  Court.”

57. Under section 6 of the 1961 Act, the Court on being satisfied that the  

foreign award was enforceable under the Act, would first order the award to  

be  filed  and  then  proceed  to  pronounce  judgment  according  to  the  

award. The judgment would lead to a decree against which no appeal would  

lie  except insofar as the decree was in excess of or not in accordance  

with the award.  

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58. Section 49 of the present Act makes a radical change in that where the  

court is satisfied that the foreign award is enforceable, the award itself would  

be deemed to be a decree of the Court. It, thus, not only omits the procedural  

formality for the court to pronounce judgment and a decree to follow on that  

basis  but also completely removes the possibility of the decree being in  

excess of, or not in accordance with the award. Thus, even the limited  

basis on which an appeal would lie under sub-section (2) of section 6 of  

the 1961 Act, is taken away.  There is, thus, no scope left for an appeal  

against an order of the court for the enforcement of a foreign award. It is for  

this reason that section 50(1)(b) provides for an appeal only against an order  

refusing to enforce a foreign award under section 48.  

59. There can be no doubt that under section 6, except on the very limited  

ground,  no  appeal  including  a  Letters  Patent  Appeal  was  maintainable  

against the judgment and decree passed by the Court under section 6(1). It  

would  be  futile,  therefore,  to  contend  that  though  the  present  Act  even  

removes the limited basis on which the appeal was earlier maintainable, yet  

a Letters Patent Appeal would lie notwithstanding the limitations imposed  

by section 50 of the Act. The scheme of sections 49 and 50 of the 1996 Act  

is devised specially to exclude even the limited ground on which an appeal  

was earlier provided for under section 6 of the 1961 Act. The exclusion of  

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appeal by section 50 is, thus, to be understood in light of the amendment  

introduced in the previous law by section 49 of the Act.  

60.  There is another way to look at the matter. It will be illuminating to  

see how the courts viewed the Arbitration Act,  1940 shortly after  it  was  

enacted and even while the previous law, the Arbitration Act, 1899 coupled  

with the Schedule 2 of the Code of Civil Procedure was still fresh in the  

courts’ mind. In Gauri Singh v. Ramlochan Singh, AIR (35) 1948 Patna 430,  

the plaintiff had filed a suit for an order for filing an arbitration award and  

preparing a decree of the court on that basis. The award was in writing and it  

was also registered on the admission of the arbitrators but the award was  

made not on the basis of any arbitration agreement in writing but on an oral  

reference. Before the division bench of the Patna High Court, the question  

arose  regarding the  maintainability  of  the  suit.  Agarwala,  C.J.  in  a  brief  

order held that Chapter II of the Act would only apply when the agreement  

was in writing. In other words, the existence of an “arbitration agreement”  

i.e. an agreement in writing, was the foundation of the court’s jurisdiction to  

direct the arbitrators, under section 14(2), to cause the award to be filed in  

court. But Meredith, J. examined the matter in greater detail. He considered  

the question, whether the Act of 1940 was exhaustive or whether it related  

only to awards following arbitration agreements within the meaning of the  

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Act.  The  case  of  the  plaintiff  was  that  there  was  an  oral  reference  to  

arbitration. Such an oral reference was perfectly valid and so was the award  

upon it. But it did not come within the scope of the Act. The award could,  

therefore, be enforced by an ordinary suit under the Code of Civil Procedure.  

Rejecting  the  submission,  in  paragraphs  20,  21  and  22 of  the  judgment,  

Meredith, J. observed as follows:

“20.  ….. It  may be regarded as settled that,  so far as  Sch.2,  Civil P.C., and the Arbitration Act of 1899 were concerned, an  award based upon an oral submission or reference to arbitration  was  not  touched,  but  was  perfectly  legal  and  valid,  and  the  award  could  be  enforced  by  suit,  though  not  by  the  special  procedure under the provisions of the Civil P.C., or the 1899  Act.  That  Act  was  regarded  as  not  exhaustive  even  in  the  limited areas where it was applicable.  …..

21.  This  view was  also  taken  by  the  Madras  High Court  in  Ponnamma v. Marappudi Kotamma [19 A.I.R. 1932 Mad. 745],  and also in our own High Court in  Ramautar Sah v.  Langat  Singh, A.I.R. 1931 Pat. 92. The view there taken was that there  is  nothing in law which requires a submission of the dispute  between  the  parties  to  arbitration  to  be  in  writing.  A parole  submission is a legal submission to arbitration.

22. Has the position been altered by the Act of 1940? In my  opinion it has. The Act of 1899 was described as "An Act to  amend the law relating to arbitration", but the Act of 1940 is  headed as "An Act to consolidate and amend the law relating to  arbitration", and the preamble says "whereas it is expedient to  consolidate and amend the law relating to arbitration in British  India".  It  is  an  Act  to  consolidate  the  arbitration  law.  This  suggests that it is intended to be comprehensive and exhaustive.  ……”

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61. Making  reference  to  sections  47,  26  and  30  of  the  1940  Act,  in  

paragraph 26 of the judgment, His Lordship concluded as follows:

“26.  I  think  I  am  justified  in  holding,  in  view  of  these  provisions, that the Act was intended to be exhaustive of the  law and procedure relating to arbitration. I cannot imagine that  the words "arbitrations" and "awards" could have been used in  such specific provisions without more, specially having regard  to the definition of award, if it was intended to leave it open to  the  parties  to  an  award  based  upon  an  oral  submission  to  proceed to enforce it or set it aside by proceedings by way of  suit altogether outside the Act. Let us take it then that the Act  intended that there should be no such proceedings.”

62. In paragraph 33, he further said:

“If then, as I have held, the Act is intended to be exhaustive,  and contains  no  provisions  for  the  enforcement  of  an  award  based upon an oral submission, the only possible conclusion is  that the Legislature intended that such an award should not be  enforceable at all, and that no such suit should lie.”

63. In  Belli  Gowder v.  Joghi  Gowder,  AIR  (38)  1951  Madras  683,  

Viswanatha Sastri, J. took the same view on a case very similar in facts to  

the case in the Patna decision.  In paragraph 2 of the judgment, Sastri,  J.  

observed as follows:

“2. The first point argued by the applt's learned advocate is that  the suit  is one to enforce an award given on oral  reference or  submission to arbitration and is not maintainable by reason of the  provisions of the Arbitration Act, 1940. It is common ground that  there was no written submission to the panchayatdars.  Prior to  the enactment of the Arbitration Act of 1940 it had been held by  this and other H. Cts that there was nothing in the Arbitration Act  of 1899 or in Sec. 89 and schedule 2 of the C. P. C. of 1908  rendering  an  oral  agreement  to  refer  to  arbitration  invalid.  A  

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parole submission was held to be a legal submission to arbitration  and an award passed on an oral reference was held to be valid  and enforceable  by a suit  though not by the special  procedure  prescribed by Sch 2, C. P. C. or the Arbitration Act of 1899…. …. The question whether it was intended merely to make awards  on  oral  submissions  unenforceable  under  the  procedure  of  the  Arbitration  Act  or  to  make  them  invalid  and  unenforceable  altogether, would depend to a large extent on whether the Act is  exhaustive of the law of arbitration. I am inclined to think that it  is. I therefore hold that an award passed on oral submission can  neither be filed and made a rule of Ct under the Act, nor enforced  apart  from the  Act.  The  same  opinion  has  been  expressed  in  'Gauri Singh v. Ramlochan Singh', AIR (35) 1948 Pat 430: (29  PLT 105).”

64. In Narbadabai and Ors. v. Natverlal Chunilal Bhalakia & Anr., AIR  

1953 Bombay 386, a division bench of the Bombay High Court went a step  

further and held that an arbitration award could only be enforced in terms of  

section 17 of the Arbitration Act and a suit filed for enforcement of an award  

was not maintainable. Chagla, C.J. speaking for the court, in paragraph 5 of  

the judgment, held and observed as follows:

“5.  Whatever the law on the subject may have been prior to the  Indian Arbitration Act 10 of 1940, it is clear that when this Act  was  passed,  it  provided  a  self-contained  law  with  regard  to  arbitration. The Act was both a consolidating and amending law.  The  main  object  of  the  Act  was  to  expedite  and  simplify  arbitration proceedings and to obtain finality; and in our opinion  when we look at the various provisions of the Arbitration Act, it  is clear that no suit can be maintained to enforce an award made  by arbitrators and an award can be enforced only by the manner  and according to the procedure laid down in the Arbitration Act  itself.  Section  14  deals  with  signing  and  filing  of  the  award.  Section 15 deals with the power of the Court to modify the award  

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in  cases  set  out  in  that  section  and Section 16 deals  with  the  power of the Court to remit the award. Then we come to S.17 and  that provides that  

"Where the Court sees no cause to remit the award or any  of the matters referred to arbitration for reconsideration or  to set aside the award the Court shall,  after the time for  making an application to set aside the award has expired,  or  such  application  having  been made,  after  refusing  it,  proceed  to  pronounce  judgment  according  to  the  award,  and  upon  the  judgment  so  pronounced  a  decree  shall  follow, and no appeal shall lie from such decree except on  the  ground  that  it  is  in  excess  of,  or  not  otherwise  in  accordance with the award."  

Therefore, Section 17 lays down the procedure by which a decree  can  be  obtained  on  an  award.  The  Act  gives  the  right  to  the  parties to challenge the award by applying for setting aside the  award after the award is filed under Section 14, but if that right is  not availed of or if the application is dismissed and the Court has  not  remitted  the  award,  then  the  Court  has  to  pronounce  judgment  according  to  the  award,  and  upon  the  judgment  so  pronounced a decree has to follow. Mr. Desai does not dispute, as  indeed  he  cannot,  that  when  the  award  was  published  by  the  arbitrators,  he could have followed the procedure laid down in  the Arbitration Act and could have applied for judgment under  Section  17.  But  Mr.  Desai  contends  that  Section  17  does  not  preclude  a  party  from filing  a  suit  to  enforce  the  award.  Mr.  Desai says that Section 17 gives a party a summary remedy to  obtain judgment upon the award but that summary remedy does  not bar a suit. …”

65. He, then, considered sections 31 and 32 of the Act and came to hold  

as follows:  

“6…. Mr.  Desai  is  undoubtedly  right  that  before  the  Act  of  1940 the view was taken that an award did not lose its efficacy  merely because it was not filed and no action was taken on it by  proceedings  under  the  arbitration  law.  But  the  question  is  whether  that  view is  possible  after  the  Arbitration  Act  came  

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into  force  and  the  Legislature  enacted  S.32.  Therefore,  with  respect,  we  agree  with  the  view  taken  by  the  Madras  High  Court in –'Moolchand v. Rashid Jamshed Sons & Co.', [(’46)  AIR 1946 Mad.  346] and the view taken by the Patna High  Court  in—  'Ramchander  Singh  v.  Munshi  Mian  [(’42)  AIR  1942 Bom 101]., & the view taken by the Punjab High Court in  – 'Radha Kishen v. Ganga Ram [(’51) AIR 1951 Punj 121].   7. The result, therefore, is that the plaintiff cannot maintain this  action to enforce the award.  ….. Therefore, if we are right in  the view we take as to the interpretation of Section 32, then it is  clear that Shah J. with respect, had no jurisdiction to try a suit  which in substance and in effect was a suit to enforce an award.  The result, therefore, is that the suit must fail on the preliminary  ground that the suit is not maintainable, the suit being one to  enforce  an award duly given by arbitrators  appointed  by  the  parties and also because the award deals with the very disputes  which are the subject-matter of the suit. ….”

66. In  S.N.  Srikantia  &  Co. v.  Union  of  India  and  Anr.,  AIR  1967  

Bombay 347, the question that arose for consideration was whether a court  

has the power to grant interest on the principal sum adjudged by an award  

from the date of the award till payment. The plaintiff in the case claimed that  

the court should award interest in the principal sum adjudged by the award at  

a certain rate  from the date of the award till  the date of the decree,  and  

further interest on the said principal sum at another rate from the date of the  

decree till payment. The plaintiff’s claim was resisted on the plea that under  

section 29 of the 1940 Act, interest on the principal sum adjudged by an  

award could not be granted from the date of the award till the passing of the  

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decree. It was contended on behalf of the plaintiff that section 29 was merely  

an  enabling  provision  but  that  cannot  stand  in  the  way  of  the  court  in  

awarding interest for the prior period, namely, from the date of the award  

onwards till the passing of the decree. Tulzapurkar, J., (as his Lordship then  

was)  referred  to  the  earlier  decisions  of  the  Bombay  High  Court  in  

Narbadabai  and relying upon the decisions of Patna High Court in  Gauri  

Singh and Madras High Court in Belli Gowder held an observed as follows:

“I may mention that a contention was raised in that case that  though Section 17 of the Act laid down the procedure by which  a decree could be obtained on an award that  Section gave a  summary remedy to a party to an award for a judgment upon an  award,  but  that  such  summary  remedy did  not  bar  a  suit  to  enforce an award. This contention was negatived by this Court  and it was held that for enforcing an award the procedure laid  down in the Act itself could alone be availed of by a party to  the award. It is no doubt true that Section 32 of the Act was  referred to, which expressly barred suits "for a decision upon  the existence, effect or validity of an award" and it was held  that the expression "effect of the award" was wide enough, to  cover a suit to enforce an award. At the same time this Court  did take the view that since the Act was a self-contained Code  with regard to arbitration and was exhaustive, an award could  be enforced only by the manner and according to the procedure  laid down in section 17 of the Act. In my view, these decisions  and particularly, the decisions of the Patna High Court and the  Madras High Court clearly indicate the corollary which follows  upon an Act being regarded as exhaustive viz.. 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 my view,  Section 29 of the Act also is exhaustive of the whole law upon  the subject of "interest on awards" and since the said section  enables  the  court  to  award  interest  on  the  principal  sum  

54

adjudged by an award from the date of the decree onwards, it  must be held that it carries with it the negative import that it  shall not be permissible to the Court to award interest on the  principal sum adjudged by an award for any period prior to the  date of the passing of the decree.”

67. We have so far seen the decisions of the High Courts holding that a  

suit for enforcement of an arbitration award made on an oral reference was  

not maintainable, an arbitral award could only be enforced in terms section  

17 of the Arbitration Act and a suit for the enforcement of an arbitral award  

was not maintainable,  and third, that no interest could be awarded on the  

amount adjudged in the award beyond the provisions of section 29 of the  

Arbitration Act.   

68. We now come back to the decision of this Court in Mohindra Supply  

Co. in  which  the  issue  was  about  the  maintainability  of  an  appeal,  

particularly, a letters patent appeal. It is seen above that, in Mohindra Supply  

Co. the court held that a letters patent appeal was not maintainable in view  

of section (2) of section 39 of the 1940 Act. To that extent, the decision may  

not  have  any  bearing  on  the  present  controversy.  But,  in  that  decision  

observations of great significance were made in regard to the nature of the  

1940 Act. It was observed (SCR page 500):  

“The  proceedings  relating  to  arbitration  are,  since  the  enactment of the Indian Arbitration Act X of 1940, governed by  the  provisions  of  that  Act.  The  Act  is  a  consolidating  and  

55

amending  statute.  It  repealed  the  Arbitration  Act  of  1899,  Schedule 2 of the Code of Civil Procedure and also cls. (a) to  (f) of s. 104(1) of the Code of Civil Procedure which provided  for appeals from orders in arbitration proceedings. The Act set  up machinery for all contractual arbitrations and its provisions,  subject  to  certain  exceptions,  apply  also  to  every  arbitration  under any other enactment for the time being in force, as if the  arbitration were pursuant to an arbitration agreement and as if  that, other enactment were an arbitration agreement, except in  so  far  as  the  Arbitration  Act  is  inconsistent  with  that  other  enactment or with any rules made thereunder. …. …”

69. It was further observed and held (SCR page 506):

“But it was urged that the interpretation of s.39 should not be  divorced from the setting of legislative history, and if regard be  had  to  the  legislative  history  and  the  dictum  of  the  Privy  Council  in  Hurrish Chunder Chowdry v.  Kali Sundari Debia  [(1882) L.R.10 I.A. 4, 17] which has been universally followed,  in considering the extent of the right of appeal under the Letters  Patent, the Court would not be justified in restricting the right  of appeal which was exercisable till 1940 by litigants against  decisions of single Judges of High Courts in arbitration matters  from orders  passed  in  appeals.  In  considering  the  argument  whether the right of appeal which was previously exercisable  by  litigants  against  decisions  of  single  Judges  of  the  High  Courts in appeals from orders passed in arbitration proceedings  was  intended  to  be  taken  away  by  s. 39(2) of  the  Indian  Arbitration Act, the Court must proceed to interpret the words  of the statute without any predisposition towards the state of the  law before the Arbitration Act was enacted.  The Arbitration  Act of 1940 is a consolidating and amending statute and is  for all purposes a code relating to arbitration…..”

70. And (SCR pages 512-513):

“Prior to 1940 the law relating to contractual arbitration (except  in so far as it was dealt with by the Arbitration Act of 1899)  was contained in the Code of Civil Procedure and certain orders  passed by courts in the course of arbitration proceedings were  

56

made appealable under the Code of 1877 by s. 588 and in the  Code of 1908 by s.104. In 1940, the legislature enacted Act X  of 1940, repealing schedule 2 and s. 104(1) clauses (a) to (f) of  the Code of Civil Procedure 1908 and the Arbitration Act of  1899. By s. 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-s.2 and the clause in  s.104 of  the  Code  of  1908  which  preserved  the  special  jurisdiction under any other law was incorporated in s. 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.”

“There is in the Arbitration Act no provision similar to s. 4 of  the Code of Civil Procedure which preserves powers reserved  to  courts  under  special  statutes.  There  is  also nothing in  the  expression  "authorised  by  law to  hear  appeals  from original  decrees  of  the Court"  contained in s. 39(1) of the Arbitration  Act  which  by  implication  reserves  the  jurisdiction  under  the  Letters Patent to entertain an appeal against the order passed in  arbitration proceedings.  Therefore,  in so far as Letters Patent  deal  with  appeals  against  orders  passed  in  arbitration  proceedings,  they  must  be  read  subject  to  the  provisions  of  s. 39(1) and (2) of the Arbitration Act.”

“Under the Code of 1908, the right to appeal under the Letters  Patent  was  saved  both  by  s. 4 and  the  clause  contained  in  s. 104(1), but by the Arbitration Act of 1940, the jurisdiction of  the Court under any other law for the time being in force is not  saved;  the  right  of  appeal  can therefore  be exercised  against  orders  in  arbitration  proceedings  only  under  s. 39,  and  no  appeal  (except  an  appeal  to  this  Court)  will  lie  from  an  appellate order.”

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71. Mohindra  Supply  Co. was  last  referred  in  a  constitution  bench  

decision of this Court in P.S. Sathappan, and the way the constitution bench  

understood and interpreted  Mohindra Supply Co. would be clear from the  

following paragraph 10 of the judgment:

“10…..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.”

72. It is, thus, to be seen that Arbitration Act 1940, from its inception and  

right through 2004 (in P.S. Sathappan) was held to be a self-contained code.  

Now,  if  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 application of one of  

the general principles that where the special Act sets out a self-contained  

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code  the  applicability  of  the  general  law  procedure  would  be  impliedly  

excluded.  

73. We, thus, arrive at the conclusion regarding the exclusion of a letters  

patent  appeal  in two different ways;  one,  so to say, on a micro basis  by  

examining the scheme devised by sections 49 and 50 of the 1996 Act and the  

radical change that it brings about in the earlier provision of appeal under  

section 6 of the 1961 Act and the other on a macro basis by taking into  

account the nature and character of the 1996 Act as a self-contained and  

exhaustive code in itself.

74. In light of the discussions made above, it must be held that no letters  

patent appeal will lie against an order which is not appealable under section  

50 of the Arbitration and Conciliation Act, 1996.  

75. In the result, Civil Appeal No.36 of 2010 is allowed and the division  

bench order  dated May 8,  2007,  holding that  the  letters  patent  appeal  is  

maintainable, is set aside. Appeals arising from SLP (C) No.31068 of 2009  

and SLP (C) No.4648 of 2010 are dismissed.

76. SLP (C) Nos.13626-13629 of 2010 and SLP (C) Nos.22318-22321 of  

2010  are  dismissed  insofar  as  they  seek  to  challenge  the  orders  of  the  

division bench holding that the letters patent appeals were not maintainable.  

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These two SLPs may now be listed only in regard to the challenge to the  

orders passed by the single judge.

77. There will be no order as to costs.  

         …………………… ……J.

(AFTAB ALAM)

       …………………… ……J.

(R.M. LODHA) New Delhi; July 8, 2011.  

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