J.C.SHAH - (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 : "(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 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." The two sub-sections of Section 39 are manifestly part of a single legislative pattern. By sub-s. (1), the right to appeal is conferred against the specified orders and against no other orders; and from an appellate order passed under sub-s. (1) no second appeal (except an appeal to this Court) lies. on the question whether the interdict, in sub-s. (2) operates against an appeal under the Letters Patent, there has been a divergence of opinion amongst the High Courts in India. The Bombay High Court in Madhavdas v. Vithaldas, ILR (1952) Bom 570 : ( AIR 1952 Bom 229) held that there is no further right of appeal under the Letters Patent when a Single Judge of the High Court disposes of an appeal under S. 39 (1) of the Arbitration Act. The same view was expressed by the Madras High Court in Radha Krishna Murthy v. Ethirajulu Chetty & Co., ILR (1945) Mad 564 : (AIR 1945 Mad 184). In Hanuman Chamber of Commerce Ltd., Delhi v. Jassa Ram Hira Nand, AIR 1948 Lah 64 and Banwari Lal v. Hindu College, ILR (1948) E P 159:(AIR 1949 E P 165) it was held that a right to appeal under the Letters Patent against an order passed in appeal under S. 39 (1) is not restricted by S. 39 (2). In the view of the Lahore and the East Punjab High Courts appeals prohibited by sub-s. (2) were second appeals, i.e., appeals under S. 100 of the Civil Procedure Code and "intra-court appeals" such as appeals under the Letters Patent from an order of a single Judge to a Bench of the same Court were not prohibited. The Madras High Court in a recent judgment Mulchand Kewal Chand Daga v. Kissan Dass Gridhardass, 74 Mad L W 408 (FB) - has overruled its earlier decision in Radha Krishna Murthy's case, ILR (1945) Mad 564 : (A I R 1945 Mad 184) and has herd that S. 39 deals only with appeals from orders passed by a Court to a superior Court and not with appeals "intra-court" and therefore S. 39 (2) does not operate to prohibit an appeal under the Letters Patent against the order of a single Judge exercising appellate jurisdiction in an arbitration matter.
(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.";