Bani Dhar vs Rina Dhar

Indira Banerjee, J. - This appeal is against an Order dated 14th July, 2015 passed by the learned Single Bench in Execution Case No. 121 of 2014, arising out of Award Case No. 55 of 1998, as modified by a subsequent Order dated 21st July, 2015, whereby the learned Single Bench rejected the preliminary objection of the appellant judgment debtor to the execut-ability of a decree dated 4th May, 2000 in terms of an arbitral award made and published on 27th July, 1998 and appointed a Receiver over the assets of the appellant judgment debtor, in terms of Prayer (a) of Column 10 of the Tabular Statement filed on behalf of the respondent decree/award holders.

Disputes and differences arose in relation to the partnership business carried out under the style of "Imperial Paper House". Since the Partnership Agreement contained a clause for reference of disputes to arbitration, the respondent decree/award holders filed an application under Section 20 of the Arbitration Act, 1940 in this Court, being Special Suit No. 90 of 1997.

By an Order dated 28th February 1997, passed in the said Special Suit No. 90 of 1997, Mr. Joy Saha, an Advocate of this Court was appointed arbitrator. The learned arbitrator, after hearing the parties and after considering the pleadings and the evidence on record made and published his award on 27th July, 1998.

The appellant judgment debtors filed an application being AP No. 455 of 1998, under Sections 30 and 33 of the Arbitration Act, 1940 for setting aside the said Award dated 27th July, 1998.

The said application was rejected by a judgment and Order dated 11th April, 2000. Therefore, on 4th May, 2000 a judgment and decree was passed upon the said award dated 27th July, 1998 in terms of Section 17 of the Arbitration Act, 1940.

The appellant judgment debtor filed an appeal being APOT 404 of 2000 against the judgment and Order dated 11th April, 2000 whereby the application of the judgment debtor, for setting aside of the award had been rejected.

By a judgment and Order dated 24th April, 2001, the Division Bench set aside the judgment and Order dated 11th April, 2000 in AP 455 of 1998 and remitted the said application for setting aside of the award to the appropriate Bench having determination, for fresh hearing.

Thereafter, the application being AP No. 455 of 1998 for setting aside the award was heard afresh. By a judgment and Order dated 23rd December, 2004, the learned Single Bench set aside the award.

Being aggrieved, the respondent decree/award holders filed an appeal being APO No. 384 of 2006. The appeal was allowed by a judgment and Order dated 11th April, 2012 of the Division Bench. The judgment and Order dated 23rd December, 2004 of the learned Single Bench was set aside.

The appellant judgment debtors have apparently not questioned the judgment and order of the Division Bench before any higher forum. The respondent decree/award holders initiated proceedings for execution of the decree passed on 4th May, 2000.

Learned advocate, appearing on behalf of the appellant judgment debtor submitted that the judgment and decree of 4th May, 2000 did not survive once the judgment and Order dated 24th April, 2001 of the Appeal Court was passed setting aside the judgment and Order dated 11th April, 2000 and after the Single Bench, after denovo hearing in terms of the Order dated 24th April, 2001 of the Appeal Court, passed a judgment and Order dated 23rd December, 2004 setting aside the impugned award.

Learned advocate appearing on behalf of the appellant judgment debtor argued that the judgment and Order dated 23rd December, 2004 may have been set aside in appeal. However, that would not mean automatic restoration of the decree dated 4th May, 2000. Mr. Amjad Ali argued that there being no decree dated 4th May, 2000, there could be no question of execution of any decree on 4th May, 2000.

By the order under appeal, the learned Court rejected the objection to the execut-ability of the decree with the observation that such objection had earlier been rejected by an Order dated 2nd December, 2014. The said order dated 2nd December, 2014 had not been interfered with in appeal.

In any case, the learned Single Bench considered the submissions afresh and held that, after the Appeal Court set aside the order of the Single Bench passed on 23rd December, 2004, the award became enforceable and the decree which had been passed in terms of the award also revived. There does not appear to be any infirmity with the order of the Single Bench.

Be that as it may, the order under appeal is apparently not appealable under Section 39 of the Arbitration Act, 1940. Section 39 of the Arbitration Act, 1940 provides 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 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]."

The language of Section 39 of the Arbitration Act, 1940 makes it absolutely clear that an appeal under the said section lies only from the orders specified in the said section. The use of the words "An appeal shall lie from the following orders under this Act and (from no others) leaves no room for doubt that no appeal lies from an order in execution of a decree passed under Section 17 of the Arbitration Act, 1940.

In Union of India v. The Mohindra Supply Co. reported in AIR 1962 SC 256 the Supreme Court held:

"There is no warrant for assuming that the reservation clause in Section 104 of the Code of 1908 was as contended by counsel for the respondents, "superfluous" or that its "deletion from Section 39(1) has not made any substantial difference" : the clause was enacted with a view to do away with the unsettled state of the law and the cleavage of opinion between the Allahabad High Court on the one hand and Calcutta, Bombay and Madras High Courts on the other on the true effect of Section 588 of the Code of Civil Procedure upon the power conferred by the Letters Patent. If the legislature being cognizant of this difference of opinion prior to the Code of 1908 and the unanimity of opinion which resulted after the amendment, chose not to include the reservation clause in the provisions relating to appeals in the Arbitration Act of 1940, the conclusion is inevitable that it was so done with a view to restrict the right of appeal within the strict limits defined by Section 39 and to take away the right conferred by other statutes. The Arbitration Act which is a consolidating and amending Act, being substantially in the form of a code relating to arbitration must be construed without any assumption that it was not intended to alter the law relating to appeals. The words of the statute are plain and explicit and they must be given their full effect and must be interpreted in their natural meaning, uninfluenced by any assumptions derived from the previous state of the law and without any assumption that the legislature must have intended to leave the existing law unaltered. In our view the legislature has made a deliberate departure from the law prevailing before the enactment of Act X of 1940 by codifying the law relating to appeals in Section 39."

In Union of India v. K. Satyanarayan & Co. reported in 1995 (1) CLJ 458 a Special Bench of Three Judges of this Court, clearly held that if an appeal did not lie from an order passed by the Single Judge in terms of Section 39 of the Arbitration Act, 1940, there could be no doubt whatsoever that such an appeal would not be maintainable under Clause 15 of the Letters Patent.

The Supreme Court, as well as the Special Bench of this Court have, on considering the words "an appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order�.." in Section 39(1) of the Arbitration Act, 1940, held that no appeal would lie under the Letters Patent, against an order from which no appeal lay under Section 39 of the said Act.

The Arbitration Act, 1940 has been repealed and replaced by the Arbitration and Conciliation Act 1996, hereinafter referred to as the 1996 Act. Section 37 of the 1996 Act, which is similar to Section 39 of the Arbitration Act, 1940 provides as follows :-

"37. Appealable orders.- (1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely :-

(a) granting or refusing to grant any measure under section 9;

(b) setting aside or refusing to set aside an arbitral award under section 34.

(2) An appeal shall also lie to a Court from an order of the arbitral tribunal �

(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."

In Fuerst Day Lawson Limited v. Jindal Exports Limited reported in (2011) 8 SCC 333 a Division Bench referred to an relied upon Union of India v. Mohindra Supply Co. (supra) and held:-

"89. It is, thus, to be seen that Arbitration Act, 1940, from its inception and right through to 2004 (in P.S. Sathappan) was held to be a self-contained code. Now, if the 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 the application of one of the general principles that where the special Act sets out a self-contained code the applicability of the general law procedure would be impliedly excluded."

In Fuerst Day Lawson Limited v. Jindal Exports Limited (supra), the Supreme Court has clearly held that no appeal would lie under Clause 15 of the Letters Patent against an order which is not appealable under Section 37 of the 1996 Act. The order under appeal before us is, for the same reason, not appealable under Section 39 of the 1940 Act.

In Modi Korea Telecommunication Ltd. v. Appcon Consultants Pvt. Ltd. reported in 1999 (II) CHN 107, a Division Bench of this Court held that the Letters Patent was subject to the provisions of Section 37(1) of the 1996 Act. However, when the order was not under the provisions of the 1996 Act, the said power of jurisdiction of the High Court under Clause 15 of the Letters Patent to entertain an appeal from any judgment would remain unaffected. Where the question of jurisdiction of the Court to entertain or proceed with a suit or proceeding was raised, and a decision on that question was given, such decision would be a judgment within the meaning of Clause 15 of the Letters Patent.

In M/s. Tanusree Art Printers & Anr. v. Rabindra Nath Pal reported in 2000 (2) CHN 213, a Special Bench of Three Judges of this Court approved the judgement of the Division Bench in Modi Korea Telecommunication Ltd. v. Appcon Consultants Pvt. Ltd. (supra), to the extent that the Division Bench had held that an appeal would lie from an order purported to have been passed under the Arbitration and Conciliation Act, in the event it was found that the said order had been passed without jurisdiction and not in terms of the provisions of the said Act. The Special Bench found that no exception could be taken to the dicta that an order passed without jurisdiction, is no order in the eye of law.

On an analogy of the reasoning in Modi Korea Telecommunication Ltd. v. Appcon Consultants Pvt. Ltd. (supra) and in M/s. Tanusree Art Printers & Anr. v. Rabindra Nath Pal (supra), it may be deduced that in the event an order purportedly passed under the 1940 Act is found to be without jurisdiction and not in terms of the provisions of the 1940 Act, an appeal would lie under Clause 15 of the Letters Patent.

A judgment and decree passed in terms of an award under Section 17 of the 1940 Act is executable under the provisions of the Civil Procedure Code and in particular Order 21 read with Sections 36 to 47, 49 to 65, 67, 73 and 74 of the Civil Procedure Code.

Section 104 of the Civil Procedure Code provides for appeals from orders. An appeal lies from an order made under the rules contained in the Civil Procedure Code from which an appeal is expressly allowed by the rules, apart from other orders specifically mentioned in the said section. Order 43, Rule 1 enumerates the orders against which an appeal shall lie under the provisions of Section 104.

An order in execution under Order 21 is not appealable under Order 43, Rule 1 save and except :

"(i) an order under rule 34 of Order 21 on an objection to the draft of a document or of an endorsement;

(j) an order under rule 72 or rule 92 of Order 21 setting aside or refusing to set aside a sale;

(ja) an order rejecting an application made under sub-rule (1) of rule 106 of Order 21, provided that an order on the original application, that is to say, the application referred to in sub-rule (1) of rule 105 of that Order is appealable."

The order under appeal is, therefore not appealable under Order 43, Rule 1 . The question is whether the order under appeal is appealable under Clause 15 of the Letters Patent, which provides as follows:-

"And we do further ordain, that an appeal shall lie to the said High Court of Judicature at Fort William in Bengal from the judgment (not being a judgment passed in the exercise of appellate jurisdiction �� of one Judge of the said High Court or one Judge of any Division Court ��� and that notwithstanding anything hereinbefore provided an appeal shall lie to the said High Court from a judgment of one Judge of the said High Court�."

This Court has, therefore, to examine whether the order under appeal is a judgment within the meaning of Clause 15 of the Letters Patent. In finding out whether the order is a judgment within the meaning of Clause 15 of the Letters Patent, it is to be examined if the order affects the merits of the action between the parties, by determining some right or liability. The nature of the order would have to be examined, in order to ascertain whether there has been a determination of any right or liability. Even an interlocutory order might be a judgment, if it contains the traits and trappings of finality, either when the order decides the questions in controversy in an ancillary proceeding or in the suit itself or in a part of the proceeding, as held by the Supreme Court in Shah Babulal Khimji v. Jayaben D. Kania and Ors. reported in AIR 1981 SC 1786. In Shah Babulal Khimji (supra), the order of the Trial Judge refusing appointment of a receiver and injunction was held to be judgment within the meaning of Letters Patent.

The award dated 27th July, 1998 has assumed finality and this Court has passed a judgment and decree in terms thereof under Section 17 of 1940 Act. In our view, an order in execution of a decree passed in terms of an award, which has assumed finality cannot be said to be without jurisdiction. Nor does such an order determine any right or liability. The impugned order is not a judgment and is, therefore, not appealable under Clause 15 of the Letters Patent.

The appeal is, therefore, dismissed.

Photostat certified copy of this judgment and order, if applied for, be supplied to the learned advocates appearing for the parties expeditiously subject to compliance of requisite formalities.