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Judgment
Muzaffar Hussain Attar, J.—The appellants filed an application for grant of interim relief u/s 9 of the Jammu & Kashmir Arbitration and
Conciliation Act of 1997 (for short 'the Act of 1997'). This application was dismissed by the learned Principal District Judge, Anantnag, vide order
dated 28.06.2011. The appellants, feeling aggrieved of the said order, challenged the same in Statutory Appeal No. 02/11, which appeal was
dismissed by the learned Single Judge on 11th July, 2011. The appellants in order to vindicate their legal rights have filed this LPA praying therein
that the impugned judgment/order be set aside and their application filed u/s 9 of the Act of 1997 be allowed. The court on 12th September, 2011,
while modifying the earlier interim order, provided that question about the maintainability of letters patent appeal would be considered at the time of
hearing of the appeal.
Mr. Allau din Ganaie, learned Dy. AG, raised preliminary objection about the maintainability of this LPA on the ground that after dismissal of
statutory appeal filed by the appellants u/s 37 of the Act of 1997, in view of the language of the said section, no further appeal can be filed in this
court. Learned counsel in this behalf referred to Section 37(3) of the Act of 1997. Learned counsel in support of his contention referred to and
relied upon the judgment of the Hon'ble Supreme Court in the case titled P.S. Sathappan (Dead) by Lrs. Vs. Andhra Bank Ltd. and Others, and
the judgment of the Hon'ble Supreme Court reported in Fuerst Day Lawson Ltd. and Others Vs. Jindal Exports Ltd. and Others etc. etc., in the
case titled Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. and other connected cases. Learned counsel also referred to the Division Bench
judgment of this court in case titled Gh. Rasool Chaku and others vs. Gh. Ahmad Chaku and others, LPA No. 273/2009, decided on 7th July,
2011. Learned counsel also referred to the case titled G.M. Pampori vs. State of J & K and others, AIR 2001 J & K 18 and submitted that LPA
being not maintainable merits dismissal.
Mr. R.A. Jan, learned senior counsel appearing on behalf of the appellants, with all his eloquence and vehemence submitted that LPA is
maintainable. Learned counsel referred to Section 37(1) and (3) of the Act of 1997 and submitted that on the plain language of Section 37(1) and
(3) the right to file LPA, which has been given under the charter of the High Court, has not been taken away. Learned counsel submitted had it
been intention of the legislatures to take away the right to file LPA they would have specifically mentioned the same in Section 37 of the Act of
1997. Learned counsel was at pains to explain that the expression used in Section 37(1) of the Act of 1997 that appeal shall lie from the orders
mentioned therein and from no others would mean that appeal under the said provision could be filed only in respect of the orders mention whereof
is made at clauses (a) and (b) of sub-sections (1) and (2) of Section 37 of the Act of 1997, and in view of the language used in the said provision
of law appeal against the other orders would not be competent. Learned counsel submitted that sub-section (3) of Section 37 of the Act of 1997,
bars filing of a second appeal from the order passed on appeal under the said section, but it does not take away the right to file an LPA. Learned
counsel also referred to Section 50 of the Arbitration and Conciliation Act of 1996 (for short 'the Act of 1996'), a central Act, and submitted that
the law laid down in Fuerst Day case was passed on consideration of Section 50 of the Act of 1996. Learned counsel submitted that the
provisions of Section 37 of the Act of 1997 and Section 50 of the Act of 1996, operate in different circumstances and are not similar. Learned
counsel submitted that the judgment(s) supra are of no help to the respondents for seeking declaration that this appeal is incompetent. Learned
counsel further submitted that power of the High Court in hearing an LPA is akin to constitutional power. Learned counsel submitted that the
jurisdiction and power to hear an LPA cannot be taken away impliedly but can be taken away if there is express bar in the statute. Learned
counsel submitted that there being no express bar in the statute, viz. Section 37 of the Act of 1997 in respect of filing of an LPA, this appeal is
competent and maintainable. Learned counsel in support of his contention referred to and relied upon decisions of the Hon'ble Supreme Court
reported in Vinita M. Khanolkar Vs. Pragna M. Pai and Others, ; Orma Impex Pvt. Ltd. Vs. Nissai Asb Pte. Ltd., .; Union of India (UOI) and
Others Vs. Aradhana Trading Co. and Others, .; and Umaji Keshao Meshram and Others Vs. Radhikabai and Another, , and submitted that this
LPA is maintainable. Learned counsel argued on the merits of the case also to show that the order passed by the learned Single Judge as also by
the court of first instance is illegal. Before dealing with the arguments of the learned counsel for the parties, the facts of the case in brief are taken
note of:
The appellants were allotted work for execution of construction work of upgradation of roads from Achabal Soumbran to Chatpal. An agreement
was executed between the parties on 30th May, 2009, authorising the appellants to proceed with the execution of construction work. The
construction work was to be initiated and completed in accordance with the terms and conditions of the contract. Allotted work was to be
completed within eighteen months. On failure of the appellants to complete the work within stipulated period, respondents issued communications
informing the appellants that despite providing ample opportunities the work has not been completed within the stipulated period. The respondents
terminated the contract and initiated steps for re-allotment of work. A fresh tender notice was issued. The appellants, feeling aggrieved of the act of
the respondents, filed application u/s 9 of the Act of 1997 before the Court of Principal District Judge, Anantnag, and sought interim reliefs. The
application was dismissed against which the appeal u/s 37 of the Act of 1997 was filed. The statutory appeal suffered dismissal consequent upon
which LPA has been filed.
In order to appreciate the issue raised, it is deemed appropriate to take notice of Section 39 of the J & K Arbitration Act, 2002 (1945 A.D.)
(for short 'the Act of 2002'), Section 37 of the Act of 1997, Section 37 of the Act of 1996 and Section 50 of the Act of 1996:
These provisions of law are almost similar/pari materia to each other.
Before dealing with the arguments advanced at bar, it is deemed necessary to ascertain the purpose of enacting Arbitration and Conciliation Act.
The dispute resolution mechanism is provided by the laws enacted by the State Legislature. The rights are sought to be enforced which arise under
common law, and which are conferred upon a person by legislative enactments. In order to enforce rights courts are established in accordance
with the mandate of the legislative enactments. With the passage of time, the nature of disputes and enforcement of rights have assumed significant
importance in the lives of the people. The people seek redressal of their disputes in the court of law. It is of common knowledge that courts for
variety of reasons take long time in disposing of the cases. The delayed disposal of cases sometimes has effect of denying justice to the litigant
party. The procedural wrangling involved in arriving at a just and lawful conclusion in court of law, and further appeal(s) provided by the statute
against the order(s)/judgment(s) passed by the court(s), sets a litigant on a journey, which for the above stated reasons may not come to an end in
one's lifetime. ""Sometimes the litigating party does not reap the benefit during his lifetime and the litigation transcends to next generations. In order
to provide an effective and expeditious mechanism for dispute resolution and in order to facilitate non-conventional settlement of disputes,
Arbitration Act was brought into existence. With the passage of time and because of new challenges the laws relating to domestic arbitration and
conciliation have been consolidated and amended in terms of the Act of 1997 by the State Government and by the Central Government in 1996.
The salutary purpose underlying arbitration and conciliation laws is to afford opportunity to the parties, who raise disputes against each other, to
settle the same by adopting and following the procedure and mechanism devised by them. The agreement between the contracting parties mostly
provide for referring any dispute which may arise, for settlement and resolution to an arbitrator. The legislature by enacting the arbitration and
conciliation laws is only acting as a facilitator between the contracting parties and is providing support mechanism. The purpose underlying the
arbitration/conciliation laws was, and is, to ensure settlement of the disputes between the contracting parties by a person/authority of their choice
and without facing the ordeals of procedural laws as also the substantive laws. The arbitrator is normally a person of choice of the parties, and on
failure to nominate an arbitrator, same is appointed by highest judicial authority of the State in terms of Section 11(6) of the Act of 1997. The
method and manner in which the Act of 1997 has been devised is to ensure that the parties are not made to suffer because of procedural
wrangling. The purpose to be achieved under the Act is to allow the parties to arrive at a conclusion at the earliest. The arbitrator has not to follow
the procedure as is being followed by the regular courts. The provisions of appeal/revision which are available in the regular courts to a litigant are
not made available to the parties under the Act of 1997- One of the essential and fundamental purposes to be achieved under the Act of 1997 is to
avoid delay in deciding the disputes. It is in this backdrop, it is to be seen whether LPA in setting of the Act of 1997, which is a complete code in
itself, would be competent and maintainable.
Section 37(3) of the Act of 1997 specifically provides that no second appeal shall lie from an order passed in an appeal under this section. The
party's right to file an appeal to the Supreme Court, however, is retained. Admittedly, an application was filed u/s 9 of the Act of 1997 by the
appellants before the court of learned Principal District Judge, Anantnag. The application was dismissed. The Act of 1997 authorises for filing of an
appeal against such an order in terms of Section 37 thereof. The statutory appeal has also been dismissed by the learned Single Judge. It is in the
aforestated backdrop the intendment of the legislature in enacting sub-section (3) of Section 37 of the Act of 1997 is to be appreciated and
understood.
It is settled proposition of law that an appeal is creature of statute and can be filed only when authorised by statute. The CPC provides for filing
of an appeal against decrees in terms of Section 96 and second appeal in terms of Section 100-A. Likewise right to file an appeal is also provided
against the orders as well. The expression used in sub-section (3) of Section 37 of the Act of 1997 ""no second appeal"", in the backdrop in which
the Act of 1997 is couched, would mean that ""no another appeal"" would lie. This ""another appeal"" would include the LPA as well. The legislature
in its wisdom after conferring the right of filing an appeal intended to bring to an end the litigation by curtailing the further right of appeal in the same
court. The legislators, however, have in specific terms retained the right to file appeal to the Supreme Court. Placing of any other interpretation on
sub-section (3) of Section 37 of the Act of 1997 would defeat the very purpose of Arbitration and Conciliation Act for which it has been brought
into existence. Support to this reasoning is derived from the fact that highest judicial authority, or his nominee, in the State has been conferred the
power of appointing an arbitrator. This has been done only to ensure that the appointment of the arbitrator does not become subject matter of
challenge either by filing of an appeal or by filing of writ petition in the same court. The legislature has in its wisdom made earnest endeavour to
ensure that efforts to have the dispute resolved through an arbitrator does not get hijacked by procedural piracy.
Section 39 of the Arbitration Act of 1940 (central Act), and Section 37 of the Act of 1996 are almost similar. This is the observation made by
the Hon'ble Supreme Court while concluding the paragraph 30 of the Fuerst Day case. Section 39 of the Act of 2002 is in pari materia with
Section 39 of the Act of 1940 and is similar to Section 37 of the Act of 1997. The Hon'ble Supreme Court in the Fuerst Day case at paragraph 30
has referred to judgment of the said court in case titled Union of India (UOI) Vs. Mohindra Supply Company, . The Hon'ble Supreme Court was
dealing with the issue as to whether LPA was maintainable in view of sub-section (2) of Section 39 of the Arbitration Act of 1940, which is in pari
materia with Section 39 of the Act of 2002. The Hon'ble Supreme Court at paragraph 3 ruled that two sub-sections of Section 39 are manifestly
part of single legislative pattern. By sub-section (1) the right to appeal is conferred against the specified orders and against no other orders; and
from an appellate order passed under sub-section (1) no second appeal except to the Supreme Court would lie. Issue 3, Page 84
The Hon'ble Supreme Court in Mohindra Supply case held that LPA was not competent and maintainable against an order passed in an
appeal filed u/s 39 of the Act of 1940 in view of the bar contained in subsection (2) thereof. As already stated. Section 39 of the Act of 1940 is in
pari materia with Section 39 of the Act of 2002. Section 39 of the Act of 1940 has been said to be similar to Section 37 of the Act of 1996 in
Fuerst Day Lawson Ltd. by the Hon'ble Supreme Court. Section 37 of the Act of 1997 is in pari materia to Section 37 of the Act of 1996. The
judgment handed down by the Hon'ble Supreme Court in Mohindra Supply case in all fours applies to this case. In that case, as already stated, in
view of language of Section 39 of the Act of 1940, it was held that LPA was not maintainable against an order passed u/s 39 thereof. On the same
analogy and in view of the law laid down by the Hon'ble Supreme Court in Mohindra Supply case this LPA is not maintainable. The Hon'ble
Supreme Court in Constitution Bench judgment reported in P.S. Sathappan (Dead) by Lrs. Vs. Andhra Bank Ltd. and Others, had the occasion
to consider the Mohindra Supply Co. case and at paragraphs 9 and 10 of the judgment after referring to the Mohindra Supply Company case
observed as under:
This question was also considered by Four Judge Bench of this court in the case of Union of India (UOI) Vs. Mohindra Supply Company, . In
this case, a dispute between the parties was referred to arbitration. The arbitrator gave an award. An application was made for setting aside the
award. That application was rejected. Against that order an appeal was preferred to the High Court u/s 39(1) of the Indian Arbitration Act, 1940.
A Single Judge of the High Court allowed the appeal and set aside the award. Thereupon a letters patent appeal was filed. The question was
whether a letters patent appeal was barred. Section 39 of the Indian Arbitration Act reads as follows:
xxx
(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.
It is thus to be seen that Section 39 specifically barred a second appeal. Also to be noticed that in Section 39 there is no saving clause similar to
that in Section 104(1), CPC Further, in the Arbitration Act there is no provision similar to Section 4, CPC. It was submitted that even though
Section 39 barred a second appeal, an analogy should be taken from Section 104, CPC and it must be held that a letters patent appeal was
maintainable. In considering this submission the conflict of opinions amongst the various High Courts regarding maintainability of a letters patent
appeal, in spite of Section 104, CPC, was set out and this court then held as follows:
The legislature in this state of affairs intervened, and in the Code of 1908 incorporated Section 4 which by the first sub-section provided:
In the absence of any specific provision to the contrary, nothing in this Code shall be deemed to limit or otherwise affect any special or local law
now in force or any special jurisdiction or power conferred, or any special form of procedure prescribed, by or under any other law for the time
being in force
and enacted in Section 104(1) that an appeal shall be from the orders set out therein and save as otherwise expressly provided, in the body of the
Code or by any law for the time being in force, from no other orders. The legislature also expressly provided that no appeal shall lie from any order
passed in appeal under this section.
Section 105 was substantially in the same terms as Section 591 of the earlier Code.
The intention of the legislature in enacting sub-section (1) of Section 104 is clear. The right to appeal conferred by any other law for the time being
in force is expressly preserved. This intention is emphasized by Section 4 which provides that in the absence of any specific provision to the
contrary, nothing in the Code is intended to limit or otherwise affect any special jurisdiction or power conferred by or under any other law for the
time being in force. The right to appeal against judgments (which did not amount to decrees) under the Letters Patent was, therefore, not affected
by Section 104(1) of the Code of Civil Procedure, 1908.
Thus, a Four Judge Bench of this court, as early in 1962, recognised that the legislature had now specifically saved a letters patent appeal. This
court then went on to hold that Section 4, CPC provided as follows:
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. u/s 39(1), art 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 of 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.
This court however noticed that in the Arbitration Act, there was no provision similar to Section 4 of the CPC which preserved powers
reserved to courts under special statutes. Under the Code of Civil Procedure, the right to appeal under the Letters Patent is saved both by Section
4 and the clause contained in Section 104(1), but by the Arbitration Act, 1940, the jurisdiction of the courts under any other law for the time being
in force is not saved. The right of appeal could, therefore, be exercised against orders in arbitration proceedings only u/s 39, and no appeal from
the appellate order (except an appeal to this court). The provisions in the Letters Patent providing for appeal, insofar 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.
The law laid by the Hon'ble Supreme Court in Mohindra Supply case, thus, holds the field even on date. The Hon'ble Supreme Court in Fuerst
Day Lawson Ltd. case in which it was dealing with Section 50 of the Act of, 1996 after considering entire case-law on the subject held that LPA
in view of the mandate contained in Section 50 of the Act of 1996 is not maintainable. Both appeal provisions contained in Section 37 and Section
50 operate in same circumstances, viz. provide for filing of appeal against certain orders. Both are appeal provisions and both have identical
provisions which bar further appeal, but both retain the right to file appeal to Supreme Court. The law laid in Fuerst Day Lawson case would, thus,
govern the case on hand also.
The Division Bench of this court in the case reported in G.M. Pampori vs. State of J & K and others, AIR 2001 J & K 18 has held, at
paragraph 7 thereof, that against an order passed by the learned Single Judge u/s 39 of the Act of 2002, LPA is not maintainable. The Division
Bench of this court (of which one of us, Hon'ble Massodi, J. was a member) in latest case titled Gh. Rasool Chaku and others vs. Gh. Ahmad
Chaku and others, LPA No. 273/2009, decided on 7th July, 2011 (supra) xerox copy of which was produced by learned counsel for the
respondents has specifically ruled that LPA against the order passed u/s 37(1) of the Act of 1997 is not maintainable. For the reasons recorded in
this judgment, we concur with the conclusions of the court recorded in aforementioned judgment.
The decision of the Hon'ble Supreme Court reported in 2009 AIR SCW 668 referred to by learned counsel for the appellants for
maintainability of the LPA is the judgment which has arisen out of Land Acquisition Act. Since it has been the consistent view of the Hon'ble
Supreme Court right from Mohindra Supply case till Fuerst Day Lawson case (2011), that LPA under Arbitration and Conciliation Act is not
maintainable, no benefit can be derived by the learned counsel for the appellants from the aforementioned judgment of the Hon'ble Supreme Court
which has arisen out of Land Acquisition Act. Similarly, the decision of the Hon'ble Supreme Court reported in Vinita M. Khanolkar Vs. Pragna
M. Pai and Others, is based on the Specific Relief Act, 1963 and would not be applicable to the facts of this case. The question whether an appeal
u/s 39 of the Act of 1940 would lie to the Division Bench of the High Court from an order of learned Single Judge remitting the award to arbitrator
for arbitration, was left unanswered. The reference to Orma Impex Pvt. Ltd. case is of no consequences as in view of the observation made in
Fuerst Day Lawson case the parties had compromised and matter could not decided by the court. In Aradhana Trading Company case it was held
by the Hon'ble Supreme Court that no LPA was maintainable against an order of the learned Single Judge rejecting an application for setting aside
the ex parte decree for making award rule of the court. Similarly, in Umaji Keshoo Meshram and others vs. Radhikabai and others (supra), the
court was concerned as to whether LPA would be maintainable when petition is filed under Articles 226 and 227 of the Constitution of India. The
issue involved in this case was not the subject matter of the said case. The Hon'ble Supreme Court in the said judgment ruled that when petition is
filed both under Articles 226 and 227 of the Constitution of India the LPA would be maintainable. The judgment reported in Amar Singh Vs.
Union of India (UOI) and Others, , deals with the interpretation of the Constitution. For our aforestated reasons, we declare that a letters patent
appeal filed against an order passed by appellate court in an appeal filed u/s 37(1) and (2) of J & K Arbitration and Conciliation Act, 1997 is not
maintainable and in sequel thereto we hold this LPA is not competent. Since it is held that LPA is not maintainable there is no need to deal with the
merits of the case. The LPA is accordingly dismissed.