1993 JTR(SC) 500
1994 23 AllLR 33 ; 1993 3 ALT(SC) 1 ; 1993 2 APLJ 52 ; 1993 2 ArbLR 95 ; 1993 2 CurCC(SC) 173 ; 1993 50 DLT 526 ; 1993 2 GLH 183 ; 1993 3 JT 394 ; 1993 2 RRR 495 ; 1993 2 Scale 798 ; 1993 3 SCC 1 ; 1993 3 SCR 640 ; 1993 2 UJ 67
SUPREME COURT OF INDIA
K.Ramaswamy : R.M.Sahai
State Of West Bengal
Versus
Gourangalal Chatterjee
Case No. : 2544 of 1993
Date of Decision : 5/11/93
Advocates Appeared: Benrejee G.K. : Ganguli A.K. : Mandal Som : Nandy S.K. : Parasaran K. : Poti P.S.
Act Referred :ARBITRATION ACT : S.39
(A) Section 39 of the Arbitration Act, read with the scheme of the Act as a consolidating and amending statute, permits appeals only from specific orders enumerated in sub-section (1), including orders that supersede arbitration by a single arbitrator. The provision expressly bars a second appeal from any order passed in appeal under Section 39(1), and any such appeal must be directed to the court authorized to hear appeals from original decrees. The jurisdiction under Letters Patent is ousted where Section 39 provides an exhaustive appellate mechanism, and the scope of appointment of an arbitrator under Clause 25 of the agreement must be interpreted in light of these statutory constraints.
(B) An appeal lies only from enumerated orders under Section 39(1); no second appeal is maintainable under Section 39(2) or Letters Patent; the High Courts appointment of an arbitrator is valid where the Chief Engineer fails to act; and Clause 25 of the agreement contemplates appointment of an alternate arbitrator upon default.
Facts of the case:
The State did not appoint an arbitrator as required under Clause 25 of the agreement despite communications to the Chief Engineer and the PWD Secretary. The respondent approached the High Court, which appointed a learned Single Judge. The Single Judge revoked the Chief Engineers authority and directed Shri D.K. Roy Chowdhury to act as the sole arbitrator. The State filed an appeal against this order, which was dismissed by the division bench, which held the appeal non-maintainable under Section 39(2) and Letters Patent. This appeal challenges that dismissal.
Findings of Court:
The learned Single Judges order was not one of the enumerated orders under Section 39(1); hence, no appeal lay against it. The earlier Supreme Court decision in Union of India v. Mohindra Supply Co. concluded that Section 39 bars any second appeal and that Letters Patent jurisdiction does not apply. The appointment of a technically qualified arbitrator (a retired Chief Engineer) was deemed valid, and the High Courts intervention was justified under Clause 25.
Issues:
Whether an appeal is maintainable against an order passed by a Single Judge under Section 39(1) of the Arbitration Act when the order pertains to the appointment of an arbitrator; and whether Letters Patent jurisdiction subsists in view of the bar created by Section 39(2).
Ratio Decidendi:
Section 39(1) enumerates the only orders from which an appeal lies, and the order appointing an arbitrator falls outside this list. Section 39(2) bars a second appeal, and the Acts structure indicates an exhaustive appellate scheme, leaving no jurisdiction under Letters Patent for such appeals.
Result:
The appeal is dismissed with costs.
(A) Section 39 of the Arbitration Act, read with the scheme of the Act as a consolidating and amending statute, permits appeals only from specific orders enumerated in sub-section (1), including orders that supersede arbitration by a single arbitrator. The provision expressly bars a second appeal from any order passed in appeal under Section 39(1), and any such appeal must be directed to the court authorized to hear appeals from original decrees. The jurisdiction under Letters Patent is ousted where Section 39 provides an exhaustive appellate mechanism, and the scope of appointment of an arbitrator under Clause 25 of the agreement must be interpreted in light of these statutory constraints.
(B) An appeal lies only from enumerated orders under Section 39(1); no second appeal is maintainable under Section 39(2) or Letters Patent; the High Courts appointment of an arbitrator is valid where the Chief Engineer fails to act; and Clause 25 of the agreement contemplates appointment of an alternate arbitrator upon default.
Facts of the case:
The State did not appoint an arbitrator as required under Clause 25 of the agreement despite communications to the Chief Engineer and the PWD Secretary. The respondent approached the High Court, which appointed a learned Single Judge. The Single Judge revoked the Chief Engineers authority and directed Shri D.K. Roy Chowdhury to act as the sole arbitrator. The State filed an appeal against this order, which was dismissed by the division bench, which held the appeal non-maintainable under Section 39(2) and Letters Patent. This appeal challenges that dismissal.
Findings of Court:
The learned Single Judges order was not one of the enumerated orders under Section 39(1); hence, no appeal lay against it. The earlier Supreme Court decision in Union of India v. Mohindra Supply Co. concluded that Section 39 bars any second appeal and that Letters Patent jurisdiction does not apply. The appointment of a technically qualified arbitrator (a retired Chief Engineer) was deemed valid, and the High Courts intervention was justified under Clause 25.
Issues:
Whether an appeal is maintainable against an order passed by a Single Judge under Section 39(1) of the Arbitration Act when the order pertains to the appointment of an arbitrator; and whether Letters Patent jurisdiction subsists in view of the bar created by Section 39(2).
Ratio Decidendi:
Section 39(1) enumerates the only orders from which an appeal lies, and the order appointing an arbitrator falls outside this list. Section 39(2) bars a second appeal, and the Acts structure indicates an exhaustive appellate scheme, leaving no jurisdiction under Letters Patent for such appeals.
Result:
The appeal is dismissed with costs.
A.K.GANGULY, G.K.BANERJEE, K.PARASARAN ATTORNEY, P.S.POTI, S.K.NANDY, SOM MANDAL
Judgment
R.M. SAHAI, J.
(1) THE short and the only question of law that arises for consideration in this appeal is if an appeal was maintainable against an order passed by the learned Single Judge under Section 39(1 of the Arbitration Act either under Section 39(2 of the Act or under the Letters Patent jurisdiction
(2) FACTS are not in dispute. Since the State did not appoint any arbitrator as provided for in Clause 25 of the agreement despite letters by the respondent to the Chief Engineer, Public Works Department (PWD) and the secretary, PWD the respondent approached the High court and a learned Single Judge by order dated 6/09/1991 revoked the authority of the Chief Engineer to act as an arbitrator and directed one shri D.K. Roy Chowdhury to act as the sole arbitrator as suggested by the respondent. Against this order the State filed an appeal which has been dismissed by the division bench upholding the objection of the respondent as not maintainable. It has been held that the appeal was not maintainable either under Section 39(2 or under Letters Patent. It is the correctness of this view that has been assailed in this appeal.
(3) SECTION 39 of the Arbitration Act came up for consideration in union of India v. Mohindra Supply Co. The court after going into detail and examining various authorities given by different High courts held at no second appeal lay under Section 39(2 against a decision given by learned Single Judge under Section 39(1. In respect of the jurisdiction under Letters Patent the court observed that since Arbitration Act was a consolidating and amending Act relating to arbitration it must be construed without any assumption that it was not intended to alter the law relating to appeals. The court held that in view of bar created by subsection (2 of Section 39 debarring any second appeal from an order passed in appeal under Ss. (1 the conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39. Therefore, so far the second part is concerned, namely, the maintainability of the appeal under Letters Patent it stands concluded by this decision.
(4) THE learned counsel for the appellant vehemently argued that since the decision by the Supreme court was in respect of an appeal directed against an order passed by a learned Single Judge in exercise of appellate jurisdiction no second appeal lay but that principle could not be applied where the order of learned Single Judge was passed not in exercise of appellate jurisdiction but original jurisdiction. The argument appears to be without any substance as Ss. (1 of Section 39 which is extracted below:
"(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-
(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
" provides that an appeal could lie only from the orders mentioned in the Ss. itself. Since the order passed by learned Single Judge revoking the authority of the Chief Engineer on his failure to act as an arbitrator was not covered in either of the six clauses mentioned in Section 39 it is obvious that no appeal could be filed against the order of the learned Single Judge.
(5) RELIANCE was placed on certain orders passed by this court and it was urged that settlement of dispute under Clause 25 of the agreement being in exclusive domain of the Chief Engineer the High court was not empowered to appoint anyone else. The submission is devoid of any merit. It is not made out from the agreement. Rather Clause 25 itself permits appointment of another arbitrator if the Chief Engineer fails or omits to act as such. Relevant portion of the agreement is extracted below:
"SHOULD the Chief Engineer be for any reason unwilling or unable to act as such arbitrator such questions and disputes shall be referred to an arbitrator to be appointed by the (sic) arbitrator shall be final, conclusive and binding on all the parties to this contract."
In one of the decisions given by this court the order of the High court was set aside as the dispute being technical in nature the appointment of a non-technical arbitrator was not justified. Here in this case the High court has appointed a retired Chief Engineer and not a non-technical man. No allegation has been made against him. Therefore, the order of the learned Single Judge also does not suffer from any infirmity.
(6) IN the circumstances the view taken by the division bench dismissing the appeal as not maintainable appears to be well-founded. The appeal accordingly fails and is dismissed with costs.