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Judgment
Nazki, J.—There is much ado about nothing. These four appeals have been filed under Clause 12 of the Letters Patent of this court and are
directed against the order rejecting the applicant's application for framing additional issues. Some facts are necessary in order to resolve
controversy. Disputes arose between Irrigation Department and the respondent, these disputes were referred to an arbitrator who gave four
awards. Awards were filed in this court, State filed objections to the award. The learned single Judge, before whom the matter was pending
framed four issues. After the framing of the issues, an application was made by the appellant State in each case for framing additional issues and for
recasting of the issues framed. The application was resisted by the respondent and the learned single Judge rejected the application. Against this
rejection for framing of additional issues and for recasting of issues already framed, this appeal has been filed under Clause 12 of Letters Patent of
this court. The preliminary objections taken is that the appeal was not maintainable in view of the bar created by Section 39 of the Arbitration Act,
hereinafter referred to as Act. The matter was heard by Division Bench of this court comprising of Justice S. C. Mathur, the then Chief Justice and
Mr. S. M. Rizvi the then Judge of this Court. The Bench framed the following questions and referred the matter to the Full Bench of this Court:--
Whether Section 41 of the Act makes the entire Code applicable to proceedings under the Act before the court, including the provisions of
appeal, particularly Sections 96 and 100 and Order XLIII thereof, or it makes applicable only to the provisions relating to procedure?
Whether an order passed by the Court in the aforesaid proceedings on an application referable to or under a provision of the Code relating to
procedure will be appealable under the provisions of the Code despite the bar created by Section 39 of the Act?
Whether an order of the aforesaid nature will be appealable under the Letters Patent of this court?
Whether in view of Section 41 of the Act an order passed in proceedings under the Act on an application moved under the Code will not be an
order under the Act within the meaning of Section 39 thereof?
The questions were framed on the assumption that there was a cleavage of opinion between various Benches of equal strength of this Court and
there was no pronouncement from the Hon'ble Supreme Court which could clinch the issue. After its reference, the matter was listed before Full
Bench of this Court comprising of Justice S. M. Rizvi, Justice B. A. Khan and Justice A. M. Mir. They returned the reference unanswered for the
reasons given in their Lordships' order dated 24th April, 1994. The matter was placed before Hon'ble the Chief Justice who on 27th April, 1994,
directed that the matter be listed before the Division Bench.
We have heard the learned counsel at length, a short controversy is to be decided in this appeal and that is whether an order which is passed in
arbitration proceedings and is not covered u/s 39 of the Arbitration Act is appealable under Clause 12 of the letters patent. Section 39 of the Act
is a provision which is contained in Chapter 6 of the Arbitration Act and this Chapter deals with appeals. Section 39 reads as under:--
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 when 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 applicability of the letters patent and also various provisions of the CPC has remained controversial. Various High Courts have held that in
spite of bar created u/s 39 of the Act, appeals are maintainable under the Letters Patent, whereas various High Courts have taken a different view.
This High Court also has taken different views as is pointed out by the Division Bench of this Court, which heard the matter earlier and referred the
matter to the Full Bench. In Union of India v. Sardar Mohinder Singh and Co. AIR 1971 J&K 101: AIR 1971 J&K 10 it was held that the bar
created by Section 39 of the Arbitration Act does not make the CPC inapplicable so far as the maintainability of the appeal is concerned. It held
that words in Section 39, and from no others are incapable of taking into their sweep an order passed either under the CPC or under any law for
the time being in force, but the controversy has come to an end by a judgment of the Supreme Court reported in State of West Bengal Vs.
Gourangalal Chatterjee, , relying on its earlier judgment reported in Union of India (UOI) Vs. Mohindra Supply Company, the Court held that if an
order is not covered under any Clauses of Section 39 of the Arbitration Act, no appeal shall lie. In the matter, the controversy before the Supreme
Court in 1962 was whether the second appeal would lie in an arbitration proceedings before the Letters Patent Bench of the High Court. In this
case, the Court held at page 262; of AIR:--
Prior to 1940 the law relating to contractual arbitration (except in so far as it was dealt with by the Arbitration Act of 1899) was contained in the
CPC and certain orders passed by Courts in the course of arbitration proceedings were made appealable under the Code of 1877 by Section 588
and in the Code of 1908 by Section 104. In 1940, the legislature enacted Act X of 1940, repealing Schedule 2 and Section 104(1), Clauses (a) to
(f) of the Code of Civil Procedure, 1908, and the Arbitration Act of 1899. By Section 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 appellate orders was expressly taken away
by Sub-section (2) and the clause in Section 104 of the Code of 1908 which preserved the special jurisdiction under any other law was not
incorporated in Section 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 Section 4 of the CPC which preserves powers reserved to Courts under special statutes.
There is also nothing in the expression ""unauthorised by law to hear appeals from original decrees of the Court"" contained in Section 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 Section 39 (1) and (2) of the Arbitration Act.
After this judgment came, there was controversy of opinion since the Supreme Court was dealing with the matter where the maintainability of
second appeal was concerned, therefore, whether the law laid down by the Supreme Court would also cover even the appeals which were
preferred against the order of a single Judge exercising his original jurisdiction.
The counsel for the appellant submits that since the order has been passed which amounts to judgment within the meaning of Section 12 of the
Letters Patent, therefore, there is no bar to the maintainability of this appeal. The learned counsel for appellant further submits that the power given
to this Court to entertain appeal against the order which come within the definition of the judgment are appealable u/s 12 of the Letters Patent and
the powers granted to this Court u/s 12 of the Letters Patent cannot be clouded by the provision of Section 39 of the Arbitration Act. It has also
been argued that Section 41 of the Arbitration Act makes the entire CPC applicable to the proceedings before the Court and, therefore, Sections
96 100 and Order 43 of the Code which deals with appeals has also to be read as part and parcel of the Arbitration Act. This argument is without
any foundation. Section 41 of the Arbitration Act which makes certain provisions of the CPC applicable starts with, ""Subject to the provisions of
this Act and rules made thereunder"". This qualification will make it clear that only those provisions of the CPC are applicable in which no specific
remedy is given in the Arbitration Act, since it has been held by the Apex Court that the Arbitration Act is a self contained Code and it is clear
from Section 39 that it specifies the matters against which appeals are available. The matter is not left there but it is further mentioned that appeals
shall lie only from the orders which are covered by Section 39 and also there shall be no appeal from any other order. If the appellant fails to show
that the order was passed under any of the provisions of Section 39, he is clearly out of the Court.
Coming to the plea that the Letters Patent empowers this Court to entertain the appeal, it is sufficient to say that this matter stands concluded by
the judgment of Supreme Court reported in Union of India (UOI) Vs. Mohindra Supply Company, . In the judgment of 1993, the Supreme Court
held:
Section 39 of the Arbitration Act came up for consideration in Union of India v. Mohindra Supply Co. The Court after going into detail and
examining various authorities given by different High Courts held that no second appeal lay u/s 39(2) against a decision given by a learned single
Judge u/s 39(1). In respect of the jurisdiction under Letters Patent the Court ob- served that since Arbitration Act was a consolidating and
amending Act relating to arbitration it must be construed without any assumption that it was not intended to alter the law relating to appeals. The
Court held that in view of bar created by Sub-section (2) of Section 39 debarring any second appeal from an order passed in appeal under Sub-
section (1) the conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39.
Therefore, so far the second part is concerned, namely, the maintainability of the appeal under Letters Patent it stands concluded by this decision.
Since the matter decided in 1962, concerned second appeals, therefore, to avoid any confusion, the Supreme Court added:
The learned counsel for the appellant vehemently argued that since the decision by the Supreme Court was in respect of an appeal directed
against an order passed by a learned single Judge in exercise of appellate jurisdiction no second appeal lay but that principle could not be applied
where the order of learned single Judge was passed not in exercise of appellate jurisdiction but original jurisdiction. The argument appears to be
without any substance as Sub-section (1) which is extracted below. .......:
Provides that an appeal could lie only from the orders mentioned in the sub-section itself.
8A. After this authoritative pronouncement, by the Supreme Court, it is not necessary for us to go into various judgments passed earlier by this
High Court or by other High Courts.
In view of the judgment of the Supreme Court, we hold that the appeal is not maintainable and appeal could only be filed in Arbitration
proceedings against an order which are referable to any clause of Section 39, since the present controversy is admittedly not falling within any
clause of Section 39, therefore, this appeal is dismissed, as not maintainable.