UNION OF INDIA Vs. MOHINDRA SUPPLY CO

JUDGEMENT

(1.) A dispute arising under a contract relating to the supply of solidified fuel between Messrs. Mohindra Supply Company hereinafter referred to as the respondents and the Governor-General of India in Council was referred to arbitration of two arbitrators. On 19/03/1946, the arbitrators made and published an award directing the Governor-General to pay to the respondents Rs. 47,250.00 with interest at 3 per cent from 17/07/1944, till payment. This award was filed in the Court of the Subordinate Judge First Class, Delhi. The Governor-General applied for an order setting aside the award on certain grounds which for the purposes of this appeal are not material. The Subordinate Judge refused to set aside the award on the grounds set up and rejected the application. Against the order refusing to set aside the awarded, the Governor-General preferred to the Lahore High Court an appeal which after the setting up of the Dominions of India and Pakisthan was transferred to the Circuit Bench of the East Punjab High Court at Delhi. Falshaw, J. who heard the appeal set aside the order, because in his view the dispute could not be referred to arbitration under the contract which gave rise to the dispute and "that was sufficient to invalidate the award." Against that order an appeal was preferred under Cl. 10 of the Letters Patent of the High Court of Lahore, which by the High Court (Punjab) Order, 1947, applied to the East Punjab High Court. Before the Appellate Bench, the Governor-General contended that the appeal under the Letters Patent was prohibited by S. 39 (2) of the Indian Arbitration Act. The question whether the appeal was maintainable was referred to a Full Bench of the High Court. The Full Bench opined that an appeal from the judgment of a Single Judge exercising appellate powers did lie under Cl.10 of the Letters Patent, notwithstanding the bar contained in S. 139 (2) of the Arbitration Act After the opinion of the Full Bench was delivered, a Division Bench considered the appeal on its merits and set aside the order of Falshaw, J. The Union of India appeals against the, decision of the High Court.

(2.) IN this appeal, we are only concerned with the question whether the appeal under Cl. 10 of the Letters Patent of the High Court against the order of Falshaw, J., was maintainable. 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 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. S. 39 of the Act, which deals with appeals, provides :

(3.) SECTION 39 (2) expressly prohibits a second appeal from an order passed in appeal under S. 39(1) except an appeal to this Court. There is clear indication inherent in sub-s. (2) that the expression "second appeal" does not mean an appeal under S. 100 of the Code of Civil Procedure. To the interdict of a "second appeal," there is an exception in favour of an appeal to this Court; but an appeal to this Court is not a second appeal. If the legislature intended by enacting S. 39 (2) merely to prohibit appeals under S. 100 of the Code of Civil Procedure, it was plainly unnecessary to enact an express provision saving appeals to this Court. Again an appeal under S. 39(1) lies against an order superseding an award or modifying or correcting an award, or filing or refusing to file an arbitration agreement or staying or refusing to stay legal proceedings where there is an arbitration agreement or setting aside or refusing to set aside an award or on an award stated in the form of a special case. These orders are not decrees within the meaning of the Code of Civil Procedure and have not the effect of decrees under the Arbitration Act. S. 100 of the Code of Civil Procedure deals with appeals from appellate decrees and not with appeals from appellate orders. If by enacting S. 39 (2) appeals from appellate decrees were intended to be prohibited, the provision was plainly otiose; and unless the context or the circumstances compel, the Court will not be justified in ascribing to the legislature an intention to enact a sterile clause. In that premises the conclusion is inevitable that the expression 'second appeal' used in S. 39 (2) of the Arbitration Act means a further appeal from an order passed in appeal under S.39 (1) and not an appeal under S. 100 of the Civil Procedure Code. This view was expressed by Bavdekar, J., in ILR (1952) Bom 570 : (AIR 1952 Bom 229) and by Rajamannar, C. J., in 71 Mad L W 40S (FB); and we agree with the learned Judges that the adjective "imports a further appeal, that is, numerically second appeal."