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2002 DIGILAW 70 (JHR)

Northern Coal Fields Ltd. v. S. K. Construction Co.

2002-01-25

D.N.PRASAD, VINOD KUMAR GUPTA

body2002
ORDER The Court 1. Both these appeals are being disposed of by this common order. 2. These two appeals under Clause 10 of the Letters patent have been filed by the appellant-Northern Coal Fields Limited against the Judgment of the learned Single Judge of this Court in Misc. Appeals Nos. 292 and 293 of 1999 (R), whereby the appeals filed by the appellant under Sub-section (1) of Section 39 of the Arbitration Act, 1940 have been dismissed and the judgment and Order of the learned trial Court passed under Section 20 of the Arbitration Act, 1940 has been upheld, both with respect of the filing of the Arbitration Agreement and the appointment of Arbitrator, 3. We have heard the learned counsel for the parties. The first and foremost question which arises for consideration is about the very maintainability of the appeals under Clause 10 of the Letters Patent. 4. Section 39 of the Arbitration Act, 1940 reads thus : "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)." 5. As is manifestly and apparently clear from a bare reading of Section 39, the scope of filing even the First Appeals under the Act against the orders mentioned in various Clauses of Sub-section (1) is limited. Only such appeals can be filed under Sub-section (2) of Section 39 against the Orders (to be appealed against) which find a mention in Clause (i) to (vi) of Sub-section (1). Only such appeals can be filed under Sub-section (2) of Section 39 against the Orders (to be appealed against) which find a mention in Clause (i) to (vi) of Sub-section (1). Sub-section (2) of Section 39 being a wholly restrictive provision, clearly bars and prohibits the filing of a second appeal from any order passed in appeal under Sub-section (1) of Section 39 of the Act. It dearly, therefore, means that if a first appeal filed under Sub-section (1) of Section 39 by a party against an Order mentioned in various Sub-clauses of Sub-section (1) has been disposed of, one way or the other, no second appeal is maintainable at all. It is now a settled principle of law, therefore, and it bears repetition that no second appeal, because of the express and specific bar created by Sub-section (2) of Section 39 of the Act, is maintainable. The question which may however arise for consideration in this case is that if no second appeal is maintainable because of the bar created by Sub-section (2) of Section 39, can an order passed in Appeal filed under Sub-section (1) of Section 39 be challenged in a Letters Patent Appeal? The answer, as we shall see later, has to be in the negative. 6. In the case of Union of India v. Mohindra Supply Co. reported in AIR 1962 SC 256 , their Lordships of the Supreme Court had the following to observe with respect to the aforesaid question:-- "Section 39(2) expressly prohibits a second appeal from an order passed in appeal under Section 39(1) except an appeal to this Court. There is clear indication inherent in Sub-section (2) that the expression "Second Appeal" does not mean an appeal under Section 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 Section 39(2) merely to prohibit appeals under Section 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 Section 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 say legal proceedings. It was plainly unnecessary to enact an express provision saving appeals to this Court. Again an appeal under Section 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 say 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. Section 100 of the Code of Civil Procedure deals With appeals from appellate decrees and not with appeals from appellate orders. If by enacting Section 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 premise the conclusion is inevitable that the expression second appeal used in Section 39(2) of the Arbitration Act means a further appeal from an order passed in appeal under Section 39(1) and not an appeal under Section 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 74 Mad LW 408 (FB); and we agree with the learned Judges that the adjective imports a further appeal, that is, numerically second appeal." The problem to which attention must then be directed is whether the right to appeal under the Letters Patent is at all restricted by Section 39. Sub-section (1) and (2), Clause 10 of the Letters Patent of the High Court, in so far as it is material, provides : "And we do further ordain that an appeal shall He to the said High Court ... from the Judgment (not being a judgment passed in exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to, the Superintendence of the said High Court and not being on order made in the exercise of revisional Jurisdiction ....) of one Judge of the High Court.... from the Judgment (not being a judgment passed in exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to, the Superintendence of the said High Court and not being on order made in the exercise of revisional Jurisdiction ....) of one Judge of the High Court.... " By this clause, a right to appeal except in the cases specified, from one Judge of the High Court to a Division Bench is expressly granted. But the Letters Patent are declared by Clause 37 subject to the legislative power of the Governor General in Council and also of the Governor in Council under the Government of India Act 1915 and may in all respects be amended or altered in exercise of legislative authority. Under Section 39(1) an appeal lies from the orders specified in that Sub-section and from no others. The legislature has plainly expressed itself that the right of appeal against orders passed under the Arbitration Act may be exercised only in respect of certain orders. The right to appeal against other orders is expressly taken away. If by the express provision contained in Section 39(1), a right to appeal from a judgment which may otherwise be available under the Letters Patent is restricted, there is no ground for holding that Clause (2) does not similarly restrict the exercise of appellate power granted by the Letters Patent. If for reasons aforementioned the expression "second appeal" includes an appeal under the Letters Patent, it would be impossible to hold that notwithstanding the express prohibition, an appeal under the Letters Patent from an order passed in appeal under Sub-section (1) is competent" 7. It, therefore, clearly emerges that because of the bar created under Sub- section (2) of Section 39, a Letters Patent Appeal also is not maintainable. Despite our clear finding about the non-maintainability of the Appeals under Clause 10 of the Letters Patent, the learned counsel appearing for the appellant, persisted in arguing (and, therefore. Inviting us to return a finding) that on facts the order of the learned Single Judge requires to be interfered with. For the reasons that we state hereinafter, we have no hesitation in holding that even on facts the order of the learned Single Judge under challenge in this appeal does not required any interference by us. 8. Inviting us to return a finding) that on facts the order of the learned Single Judge requires to be interfered with. For the reasons that we state hereinafter, we have no hesitation in holding that even on facts the order of the learned Single Judge under challenge in this appeal does not required any interference by us. 8. Undoubtedly, the existence and validity of the Arbitration agreement is not under challenge. It is now a settled law that if an arbitration agreement is in existence and the same is valid and operative, mere assertion of rights or claims by a plaintiff (undoubtedly, the plaintiff and the defendant both must be parties to the agreement) and the denial of such right or claim by the defendant amounts to the existence of a dispute between the parties to an Arbitration Agreement and that being the case, the disputes immediately become referable for adjudication by an Arbitrator. 9. In the present case, a bare perusal of the plaint filed by the respondents suggests clearly and unequivocally that the plaintiff respondent had asserted its claims. Paras 6, 7 and 8 of the plaint are a clear pointer to the assertion of the claims by the plaintiff. If there was any doubt whatsoever, the schedule appended to the plaint clearly, laid the details of such claims of the plaintiff-respondent. This was the assertion by the plaintiff-respondent. The denial of three claims by the contracting opposite party has been clearly contended in the written statement filed by it in the trail Court, Paras 13 onwards of the written statement clearly suggests that the aforesaid assertions of the plaintiff-respondent as contained in para 6 onwards of the plaint have been dealt with and denied by the respondent- opposite party contracting party. Nothing more was required to be done to attract the invocation of Section 20 of the Act. 10. Looked at from whichever point of view, the appeals being wholly misconceived and totally unfounded on all counts, should not have been filed at all. We are saying so more particularly because the appellant plaintiff being a Government Undertaking, it has wasted the tax payers money !n filing these appeals and it has unnecessarily dragged the respondent in this avoidable round of litigation. 11. The appeals, are accordingly, dismissed with costs, which are assessed at Rs. We are saying so more particularly because the appellant plaintiff being a Government Undertaking, it has wasted the tax payers money !n filing these appeals and it has unnecessarily dragged the respondent in this avoidable round of litigation. 11. The appeals, are accordingly, dismissed with costs, which are assessed at Rs. 20,000/- (both the appeals) to be paid by the appellant to both the respondents in equal shares. The costs should be deposited within four weeks from today with the Advocates of the respondents.