FUERST DAY LAWSON LTD. v. JINDAL EXPORTS LTD.

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award in cases set out in that section and Section 16 deals A 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 8 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 C 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 D a decree can be obtained on an award. T~e Act gives the · right to the parties to challenge the award J;>y applying for setting aside the award after the award is filed und~r 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 fudgment 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 fv1r. 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. ... "

65Copy pinpoint65. He, then, considered sections 31 and 32 of the Act and came to hold as follows: · H

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A "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 B Arbitration Act came into force and the Legislature1 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- c 'Ramchander Singh v. Munshi Mian [('42) AIR 1942 Born 101]., & the view taken by the Punjab High Court in - 'Radha Kishen v. Ganga Ram [('51) A~R 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. .... "

66Copy pinpoint66. In S.N. Srikantia & Co. v. Union oflndia 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 G 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 plaintiffs claim was resisted on the plea that under section 29 of the 1940 Act, interest on the principal sum adjudged by an H

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award could not be granted from the date of the award till the A passing of the 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 B 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: c "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, a to cover 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 enforcej'.1 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 G 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 H

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A 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 adjudged by an award from the date of the decree onwards, it must be held that it carries with s 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."

67Copy pinpoint67. We have so far seen the decisions of the High Courts C 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.

68Copy pinpoint68. 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. F 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, G 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 els. (a) to (f) of s. 104(1) of the Code of Civil Procedure which provided for appeals from orders H

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in arbitration proceedings. The Act set up machinery for all A 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 B · so far as the Arbitration Act is inconsistent with that other enactment or with any rules made thereunder ........ "

69Copy pinpoint69. 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 ..... " G

70Copy pinpoint70. 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 H

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A of 1899) was contained in the Code of Civil Procedure and certain orders passed by courts in the course of arbitration proceedings were made appealable under the Code of 1877 bys. 588 and in the Code of 1908 by s.104. In 1940, the legislature enacted Act X of 1940, repealing schedule B 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 c 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 H

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Letters Patent was saved both by s. 4 and the clause A contained ins. 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 B Court) will lie from an appellate. order."

71Copy pinpoint71. Mahindra 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 C 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."

72Copy pinpoint72. ll 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 code the H

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A applicability of the general law procedure would be impliedly excluded.

73Copy pinpoint73. We, thus, arrive at the conclusion regarding the exclusion of a letters patent appeal in two different ways; one, 8 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 C as a self-contained and exhaustive code in itself.

74Copy pinpoint74. 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. D

75Copy pinpoint75. 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 ,E of 2010 are dismissed.

76Copy pinpoint76. 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 F letters patent appeals were not maintainable. These two SLPs may now be listed only in regard to the challenge to the orders passed by the single judge.

77Copy pinpoint77. There will be no order as to costs.

G 8.8.B. Matter disposed of.