Punjab-Haryana High Court
Parsvnath Developers Ltd vs Brig. Devendra Singh Yadav And Others on 20 January, 2025
Author: Arun Palli
Bench: Arun Palli
Neutral Citation No:=2025:PHHC:008004-DB
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
FAO-CARB-28-2022(O&M)
Reserved on : 05.11.2024
Pronounced on: 20.01.2025
Parsvnath Developers Limited ....Petitioner
V/s
Brig. Devendra Singh Yadav and others ....Respondents
CORAM: HON'BLE MR. JUSTICE ARUN PALLI
HON'BLE MR. JUSTICE VIKRAM AGGARWAL
Present: Mr. Puneet Bali, Senior Advocate with
Ms. Bhagyashri Setia, Advocate,
Mr. Rajat Joneja, Advocate and
Mr. Tarun Khaira, Advocate, for the appellant.
Mr. Siddharth Yadav, Senior Advocate with
Mr. Manav Bajaj, Advocate, and
Mr. Narender, Advocate for the respondents.
*****
VIKRAM AGGARWAL, J.
1. The appellant (M/s Parsvnath Developers Limited) assails the
order dated 06.08.2022 passed by the Court of learned District Judge
Rewari, vide which the application preferred by the respondents under Order
VII Rule 10 read with Section 151 of the Code of Civil Procedure, 1908 (for
short the “CPC“) read with Section 2(1)(e)(i) of the Arbitration and
Conciliation Act, 1996 (for short the “1996 Act”) seeking return of the
objection petition preferred by the present appellant under Section 34 of the
1996 Act was allowed and the petition preferred under Section 34 was
ordered to be returned for being presented in the competent Court.
2. The appeal raises an interesting, often debated but short
question, for which extremely lengthy arguments were addressed by both
sides. The question to be decided is as to whether the petition preferred by
the appellant under Section 34 of the 1996 Act challenging the Award dated
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21.09.2020 passed by the Arbitral Tribunal would be maintainable at Rewari
or the same would have to be filed at Delhi, where the arbitration
proceedings were conducted. The issue of “venue” and “seat” has once again
been raised by the parties which this Court shall proceed to discuss and
answer.
3. A collaboration agreement (Annexure A-2) was executed on
27.10.2005 between the respondents, who were owners in possession of land
measuring approximately 54 acres, situated in Village Dharuhera, District
Rewari and the appellant (M/s Parsvnath Developers Limited) being a
developer. It was agreed that the land in question would be developed by the
developer into a residential colony on mutually agreed terms. Various terms
and conditions were agreed upon between the parties.
4. It appears that as is the case in many such other similar
agreements, certain issues cropped up between the parties leading to the
filing of a petition under Section 9 of the 1996 Act (Annexure A-3) by the
respondents. The said petition was opposed by way of reply (Annexure
A-4). Ultimately, the petition was allowed vide order dated 04.11.2015
(Annexure A-5) holding as under:
“25. This, however, will not mean that the court will not take any
interim measure. To my mind, the purpose can be served by issuing
following directions:-
(i) The respondent, in order to secure damages, if any, to be
awarded by the arbitrator, shall not sell 10% of the residential
plots falling to its share;
(ii) If the respondent wants to transfer/alienate the project to a
third party after leaving aside 10% of the residential plots in
terms of condition No.1 above, in that eventuality, there shall be a
condition in agreement to be executed with that third party that it
shall be bound to complete the development work and to
discharge other obligations under the collaboration agreement.
Such a condition shall, however, be not necessary while selling
individual plots in retail. In other words, the condition will be
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necessary when the entire project or a major part of the project is
to be alienated en-block.
26. The petition stands disposed of in terms of the above directions
which shall hold good for a period of 90 days from today within which
arbital proceedings have to commence or till any further directions are
issued by the arbital tribunal whichever is later. Needless to say that in
case the arbital proceedings are not commenced within 90 days, the
directions will cease to operate.”
It would be significant to mention here that till this stage, no
issue of jurisdiction of the Courts had cropped up between the parties.
5. It is apparent that the project ran into rough weather leading to
the filing of a petition under Section 11(6) of the 1996 Act (Annexure A-6)
by the respondents before this Court, pursuant to which vide order dated
05.02.2016 (Annexure A-7), Justice R.M. Lodha, former Chief Justice of
India was appointed as a sole Arbitrator.
6. The arbitration proceedings commenced at Delhi and during the
pendency of the same, an application for extension of time to make the
Award was moved by the respondents before this Court, which was allowed
vide order dated 29.09.2017 (Annexure A-8) and the time to make the
Award was extended up to 11.03.2018. A similar application was again
filed but the same was withdrawn on 26.10.2018 with liberty to take such
appropriate remedy as may be available in law (Annexure A-9). The
respondents then preferred an application in the High court of Delhi for
extension of time which was allowed vide order dated 18.12.2018
(Annexure A-10).
7. Eventually, the Award was announced on 21.09.2020
(Annexure A-11). A petition under Section 34 of the 1996 Act (Annexure
A-12) was preferred by the appellant herein in the Court at Rewari. An
application under Order VII Rule 10 (Annexure A-13) was filed by the
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respondents which was opposed by way of reply (Annexure A-14). The
ground raised in the application was that since all proceedings had been
conducted at Delhi, the jurisdiction to entertain and decide a petition under
Section 34 of the 1996 Act would be with the Courts at Delhi and not with
the Courts at Rewari. This stand was accepted by the Court of learned
District Judge, Rewari and the impugned order was passed, leading to the
filing of the instant appeal.
8. Learned Senior Counsel representing the parties were heard. As
has been noticed in the opening part of the judgment, extremely lengthy
arguments were addressed by both sides.
9. Mr. Puneet Bali, learned Senior Counsel representing the
appellant vehemently submitted that the impugned order is not sustainable,
for, it had misinterpreted the judgment of the Supreme Court in the case of
BGS SGS Soma JV V/s NHPC Limited (2020) 4 SCC 234. The core
argument was that in view of the jurisdiction clause i.e. Clause 24 of the
Collaboration Agreement, the “seat” of the Arbitrator would be at Rewari
and, therefore, the petition under Section 34 of the 1996 Act would have to
be filed at Rewari. It was submitted that Delhi was merely the “venue” of
Arbitration and in view of the exclusive jurisdiction clause, the “venue” of
Arbitration would not be taken to be the “seat” of Arbitration. A detailed
reference was made to the collaboration agreement, particularly Clauses 23
and 24 thereof along with the provisions of Sections 2(1)(e)(i), 20, 34 and 42
of the 1996 Act. Referring to the judgment in the case of BGS SGS Soma
JV (supra), it was submitted that the ‘contrary indicia’ as referred to in the
said judgment is the jurisdiction clause i.e. Clause No.24 in the
Collaboration Agreement and, therefore, the “venue” of Arbitration will not
be taken to be the “seat” of Arbitration. Learned Senior Counsel also
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referred to the various documents on record, including the orders passed by
this Court from time to time, the orders passed by the Delhi High Court, the
Award and other documents to make good his argument. Reference was
also made to a number of judgments and the relevant portions of almost
judgments were read over by learned Senior Counsel at the time of
arguments. The said judgments are:-
1. BGS SGS Soma JV V/s NHPC Limited (2020) 4 SCC
234;
2. Indus Mobile Distribution Pvt. Ltd. V/s Datawind
Innovations Pvt. Ltd. (2017) 7 SCC 678;
3. Homevista Décor & Furnishing Pvt. Ltd. V/s Connect
Residuary Pvt. Ltd., 2023 SCC Online Cal 1405;
4. Kushraj Bhatia V/s DLF Power & Services Ltd., 2022
SCC Online Del 3309;
5. My Preferred Transformation & Hospitality Pvt. Ltd.
V/s Sumithra Inn, 2021 SCC Online Del 1536;
6. Commercial Division Bowlopedia Restaurant India Ltd.
V/s Debyani International Ltd., 2021 SCC Online Cal
103;
7. Aniket SA Investments LLC V/s Janapriya Engineers
Syndicate Pvt. Ltd., 2021 SCC Online Bom 919.
8. Ravi Ranjan Developers Pvt. Ltd. V/s Aditya Kumar
Chaterjee, 2022 SCC Online SC 568;
9. Swastik Gases Private Limited V/s Indian Oil
Corporation Limited, (2013) 9 SCC 32;
10. Hunch Circle Private Limited V/s Futuretimes
Technology India Pvt. Ltd., 2022 SCC Online Del 361
and
11. Hemsukh Prajapati V/s Jai Prakash Associates Limited,
AIR 2022 ALL 121.
It was submitted that where both the “venue” and the
jurisdictional “seat” are mentioned separately, “venue” is only for
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convenience. It was submitted that if the argument of the respondents is
accepted and as per Clause 23, “venue” is taken to be the “seat”, Section 34
would become otois i.e. null and void which was never the intention of the
parties. It was submitted by Mr. Puneet Bali that three situations would
arise. In the first situation, where neither “venue” nor “seat” would be
mentioned, the place where arbitration would take place would be taken to
be the “seat” of jurisdiction i.e. “venue” would be taken to be the “seat” of
jurisdiction. The second situation would be where only the “venue” is fixed
but the “seat” is not fixed. In such a case, “venue” and “seat” can be
interchanged and, therefore, the “venue” of arbitration would also become
the “seat” of arbitration. The third case would be where the “venue” and
jurisdiction are separately provided, as is the case in the present matter. It
was submitted that under such circumstances, “venue” would only be for
convenience. It was also submitted that the respondents would be stopped
from raising the issue of “venue” and “seat” once they had themselves filed
the petition under Section 11 of the 1996 Act at Chandigarh and the petition
under Section 9 of the 1996 Act at Rewari. It was also submitted that if the
Courts at Chandigarh or under the jurisdiction of this High Court do not
have the jurisdiction to deal with a petition under Section 34 of the 1996
Act, then even the appointment of Arbitrator would be illegal and the Award
would have to go.
10. Per contra, Mr. Siddharth Yadav, learned Senior Counsel
representing the respondents submitted with equal vehemence that there is
no illegality in the impugned order and for, the entire arbitration proceedings
were carried at Delhi, the petition under Section 34 of the 1996 Act would
have to be filed at Delhi alone and that the Courts at Rewari would not have
any jurisdiction to deal with the said petition. Learned Senior Counsel also
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referred to the documents on record, including the collaboration agreement
with specific reference to Clauses 23 and 24 thereof, the orders passed by
this Court and the Delhi High Court and especially the order dated
18.12.2018 (Annexure A-10) passed by the Delhi High Court, vide which
the application for extension of time was allowed. It was submitted that the
said application had been moved by the respondents herein and the Delhi
High Court duly noticed that it had the jurisdiction to deal with the
application. It was submitted that the word ‘exclusive’ had not been
mentioned in Clauses 23 and 24. It was further submitted that the
collaboration agreement was of the year 2005 and there had been a sea
change in the 1996 Act after the amendment in the year 2015. It was further
submitted that the supervisory jurisdiction would be of the Courts at Delhi,
for the proceedings had been carried out at Delhi and, therefore, the petition
under Section 34 of the 1996 Act would be maintainable at Delhi alone.
Apart from the orders annexed with the appeal, reference was also made to
certain orders annexed with the application filed for recalling of the order
dated 23.03.2023 (Annexure R-1) passed by this Court, which in any case
was not pressed, for arguments in the main appeal were being heard.
However, referring to the said orders dated 31.01.2023 and 20.03.2023
(Annexures R-3 and R-4 respectively) passed by the High Court of Delhi, it
was submitted that no objection was raised before the High Court of Delhi at
that stage and it has wrongly been stated in the grounds of appeal that
objection had been raised.
It was further submitted that 50 hearings of the arbitral tribunal
were held at Delhi. It was further submitted that under the circumstances,
the “venue” of arbitration would precede even the jurisdiction clause. It was
submitted that as an example, if there were two parties from India and
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Germany and the “venue” of arbitration was at London and appointment of
Arbitration was at Chandigarh, it could never be argued that the supervisory
Court would be Chandigarh and not London. It was further submitted that
the judgments relied upon by learned Senior Counsel representing the
appellant were prior to the 2015 amendment and some of them pertain to
Section 11 of the 1996 Act and, therefore, would not apply. It was
submitted that after three extensions having been granted by the Delhi High
Court, only the Courts at Delhi would have the jurisdiction to entertain a
petition under Section 34 of the 1996 Act. Learned Senior Counsel also,
apart from referring to the judgments relied upon by him, extensively
referred to the judgments relied upon by Mr. Puneet Bali and submitted that
the impugned order deserves to be upheld. In support of his contentions,
learned Senior Counsel placed reliance upon the following judgments:-
1. State of Maharashtra V/s Atlanta Limited, (2014) 11
SCC 619;
2. Water and Power Consultancy Services Limited V/s
Karbi Anglong Autonomous Council, (2020) 5 Guhati,
Law Reports 477;
3. Union of India V/s Arsh Constructions, OMP
(COMPLAINANT) NO.15/2023;
4. Delhi Tourism and Transportation Development
Corporation Ltd. V/s Sunehari Bagh Construction Pvt.
Ltd., (2024) SCC Online Del 378;
5. Easy Trip Planners Ltd. V/s One97 Communication
Ltd., CM(M) No.707 of 2022;
6. SBP & Co. V/s Patel Engineering Ltd. and another,
(2005) 8 SCC 618;
7. Lots Shipping Company Ltd. V/s Cochin Post Trust,
2020 SCC Online Ker 21443;
8. Bharat Aluminum Company V/s Kaiser Aluminum
Technical Services Inc., (2012) 9 SCC 552;
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9. Union Bank of India V/s Hardy Exploration and
Production (India), (2019) 13 SCC 472;
10. Indus Mobile (supra);
11. BGS Soma JV (supra);
12. Mankastu Impex Private Limited V/s Airvisual Limited,
(2020) 5 SCC 399;
13. Inox Renewables Limited V/s Jayesh Electricals
Limited, (2021) SCC Online SC 448;
14. Zapdor-Ubc-Abnjv, Delhi V/s Union of India, 2022
SCC Online All 594;
15. Ajay Singh V/s Kal Airways Private Limited and others,
2017 SCC Online Del 8934;
16. Valentine Maritime Ltd. V/s Kreuz Subsea Pte Limited
and another, 2021 SCC Online Bom 75;
17. Sepco Electri Power Construction Corporation V/s
Power Mech Projects Ltd., 2022 SCC Online SC 1243
and
18. Hindustan Construction Company Limited and another
V/s Union of India and others, (2020) 17 SCC 324.
11. The issue of maintainability of the instant appeal was also
raised by learned Senior Counsel representing the respondents. It was
submitted that in view of the provisions of Section 37 of the 1996 Act, the
instant appeal would not be maintainable. Reliance in this regard was placed
upon the judgment of the Supreme Court of India in the case of BGS SGS
Soma JV (supra).
12. Rebutting the arguments, learned Senior Counsel representing
the appellant reiterated that once a jurisdiction clause was there in the
collaboration agreement, the same would be applicable in so far as filing of
the petition under Section 34 of the 1996 is concerned. Accordingly, the
‘seat’, as fixed by the parties, would be taken to be Rewari and the Punjab
and Haryana High Court, Chandigarh and not the Delhi. As regards the
maintainability, it was submitted that as per the provisions of Order 43 Rule
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1(a), the appeal would be maintainable.
13. We have considered the submissions made by learned counsel
for the parties, have gone through the relevant statutory provisions and the
law on the subject.
14. Though, the issue of maintainability was raised after arguments
had been addressed on merits, we deem it appropriate to take up the said
issue first before touching upon the merits of the case.
15. Section 37 (1) of the 1996 Act reads as follows:
“37. Appealable orders.-(1) An appeal shall lie from the following
orders (and from no others) to the Court authorised by law to hear
appeals from original decrees of the Court passing the order, namely:
(a) refusing to refer the parties to arbitration under Section 8;
(b) granting or refusing to grant any measure under Section 9;
(c) setting aside or refusing to set aside an arbitral award under
Section 34.”
16. Section 13 of the 2015 Act reads as follows:
“13. Appeals from decrees of Commercial Courts and
Commercial Divisions. (1) Any person aggrieved by the judgment or
order of a Commercial Court below the level of a District Judge may
appeal to the Commercial Appellate Court within a period of sixty days
from the date of judgment or order.
(1-A) Any person aggrieved by the judgment or order of a
Commercial Court at the level of District Judge exercising original civil
jurisdiction or, as the case may be, Commercial Division Bench of a
High Court may appeal to the Commercial Appellate Division of that
High Court within a period of sixty days from the date of the judgment
or order:
Provided that an appeal shall lie from such orders passed by the
Commercial Division or a Commercial Court that are specifically
enumerated in Order 43 of the Code of Civil Procedure, 1908 (5 of 1908)
as amended by this Act and Section 37 of the Arbitration and
Conciliation Act, 1996 (26 of 1996).
(2) Notwithstanding anything contained in any other law for the
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from any other order or decree of a Commercial Division or Commercial
Court otherwise than in accordance with the provisions of this Act.”
17. The issue of maintainability of an appeal under Section 37 of
the 1996 Act read with Section 13(1) of the 2015 Act against an order
passed under Order 7 Rule 10 CPC directing the return of the petition under
Section 34 of the 1996 Act was first raised before this Court in the case of
BGS SGS Soma JV (supra). Vide judgment dated 12.09.2018, a coordinate
Bench held that the appeal was maintainable. When the matter reached the
Supreme Court of India, apart from merits of the case, the issue of
maintainability was also raised. The Supreme Court of India elaborately
discussed the issue of maintainability and after referring to the statutory
provisions and the entire law on the subject, came to the conclusion that
against an order passed on an application under Order 7 Rule 10 CPC
ordering the return of a petition filed under Section 34 of the 1996 Act for
presentation to the appropriate Court, no appeal under Section 37 of the
1996 Act read with Section 13(1) of the 2015 Act, would be maintainable;
“4. On 21-12-2017, the Special Commercial Court, Gurugram
allowed the application of the petitioner, and returned the Section 34
petition for presentation to the proper court having jurisdiction in New
Delhi. On 15-2-2018, the respondent filed an appeal under Section 37 of
the Arbitration Act, 1996 read with Section 13(1) of the Commercial
Courts Act, 2015 before the High Court of Punjab and Haryana at
Chandigarh. On 12-9-2018, the impugned judgment was delivered by the
Punjab and Haryana High Court, in which it was held that the appeal
filed under Section 37 of the Arbitration Act, 1996 was maintainable,
and that Delhi being only a convenient venue where arbitral proceedings
were held and not the seat of the arbitration proceedings, Faridabad
would have jurisdiction on the basis of the cause of action having arisen
in part in Faridabad. As a result, the appeal was allowed and the
judgment of the Special Commercial Court, Gurugram was set aside.
5. Dr Abhishek Manu Singhvi, learned Senior Advocate
appearing on behalf of the petitioner in SLP (C) No. 25618 of 2018, has
assailed the impugned High Court judgment on both counts. According11 of 17
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to him, on a combined reading of Section 13 of the Commercial Courts
Act, 2015 and Section 37 of the Arbitration Act, 1996, it becomes clear
that Section 13 of the Commercial Courts Act, 2015 only provides the
forum for challenge, whereas Section 37 of the Arbitration Act, 1996-
which is expressly referred to in the proviso to Section 13(1) of the
Commercial Courts Act, 2015-circumscribes the right of appeal. He
contended that this when read with Section 5 of the Arbitration Act,
1996, makes it clear that only certain judgments and orders are
appealable, and no appeal lies under any provision outside Section 37 of
the Arbitration Act, 1996. He contended that the High Court was
manifestly wrong when it said that the present appeal was appealable
under Section 37(1)(c) of the Arbitration Act, 1996 as being an appeal
against an order refusing to set aside an arbitral award under Section 34
of the Arbitration Act, 1996. According to Dr Singhvi, an order which
allows an application under Section 151 read with Order 7 Rule 10 CPC
can by no stretch of the imagination amount to an order refusing to set
aside an arbitral award under Section 34 of the Arbitration Act, 1996.
xxx xxx xxx
12. The interplay between Section 37 of the Arbitration Act, 1996 and
Section 13 of the Commercial Courts Act, 2015, has been laid down in
some detail in the judgment in Kandla Export Corpn. The precise
question that arose in Kandla Export Corpn. was as to whether an
appeal, which was not maintainable under Section 50 of the Arbitration
Act, 1996, is nonetheless maintainable under Section 13(1) of the
Commercial Courts Act, 2015. In this context, after setting out various
provisions of the Commercial Courts Act, 2015 and the Arbitration Act,
1996, this Court held: (SCC pp. 727,729, 731-34, paras 13-15, 20-22 &
27)
“13. Section 13(1) of the Commercial Courts Act, with
which we are immediately concerned in these appeals, is in two
parts. The main provision is, as has been correctly submitted by
Shri Giri, a provision which provides for appeals from judgments,
orders and decrees of the Commercial Division of the High
Court. To this main provision, an exception is carved out by the
proviso…..”
14. The proviso goes on to state that an appeal shall lie
from such orders passed by the Commercial Division of the High
Court that are specifically enumerated under Order 43 of the
Code of Civil Procedure Code, 1908, and Section 37 of the
Arbitration Act. It will at once be noticed that orders that are not
specifically enumerated under Order 43 CPC would, therefore,
not be appealable, and appeals that are mentioned in Section 37
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of the Arbitration Act alone are appeals that can be made to the
Commercial Appellate Division of a High Court.
15. Thus, an order which refers parties to arbitration
under Section 8, not being appealable under Section 37(1)(a),
would not be appealable under Section 13(1) of the Commercial
Courts Act. Similarly, an appeal rejecting a plea referred to in
sub-sections (2) and (3) of Section 16 of the Arbitration Act
would equally not be appealable under Section 37(2)(a) and,
therefore, under Section 13(1) of the Commercial Courts Act.
* * *
20. Given the judgment of this Court in Fuerst Day
Lawson, which Parliament is presumed to know when it enacted
the Arbitration Amendment Act, 2015, and given the fact that no
change was made in Section 50 of the Arbitration Act when the
Commercial Courts Act was brought into force, it is clear that
Section 50 is a provision contained in a self-contained code on
matters pertaining to arbitration, and which is exhaustive in
nature. It carries the negative import mentioned in para 89 of
Fuerst Day Lawson that appeals which are not mentioned
therein, are not permissible. This being the case, it is clear that
Section 13(1) of the Commercial Courts Act, being a general
provision vis-à-vis arbitration relating to appeals arising out of
commercial disputes, would obviously not apply to cases covered
by Section 50 of the Arbitration Act.
21. However, the question still arises as to why Section 37
of the Arbitration Act was expressly included in the proviso to
Section 13(1) of the Commercial Courts Act, which is equally a
special provision of appeal contained in a self-contained code,
which in any case would be outside Section 13(1) of the
Commercial Courts Act. One answer is that this was done ex
abundanti cautela. Another answer may be that as Section 37
itself was amended by the Arbitration Amendment Act, 2015,
which came into force on the same day as the Commercial Courts
Act, Parliament thought, in its wisdom, that it was necessary to
emphasise that the amended Section 37 would have precedence
over the general provision contained in Section 13(1) of the
Commercial Courts Act. Incidentally, the amendment of 2015
introduced one more category into the category of appealable
orders in the Arbitration Act, namely, a category where an order
is made under Section 8 refusing to refer parties to arbitration.
Parliament may have found it necessary to emphasise the fact
that an order referring parties to arbitration under Section 8 is
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not appealable under Section 37(1)(a) and would, therefore, not
be appealable under Section 13(1) of the Commercial Courts Act.
Whatever may be the ultimate reason for including Section 37 of
the Arbitration Act in the proviso to Section 13(1), the ratio
decidendi of the judgment in Fuerst Day Lawson would apply,
and this being so, appeals filed under Section 50 of the
Arbitration Act would have to follow the drill of Section 50 alone.
22. This, in fact, follows from the language of Section 50
itself. In all arbitration cases of enforcement of foreign awards, it
is Section 50 alone that provides an appeal. Having provided for
an appeal, the forum of appeal is left “to the Court authorised by
law to hear appeals from such orders”. Section 50 properly read
would, therefore, mean that if an appeal lies under the said
provision, then alone would Section 13(1) of the Commercial
Courts Act be attracted as laying down the forum which will hear
and decide such an appeal.
* * *
27. The matter can be looked at from a slightly different
angle. Given the objects of both the statutes, it is clear that
arbitration itself is meant to be a speedy resolution of disputes
between parties. Equally, enforcement of foreign awards should
take place as soon as possible if India is to remain as an equal
partner, commercially speaking, in the international community.
In point of fact, the raison d’être for the enactment of the
Commercial Courts Act is that commercial disputes involving
high amounts of money should be speedily decided. Given the
objects of both the enactments, if we were to provide an
additional appeal, when Section 50 does away with an appeal so
as to speedily enforce foreign awards, we would be turning the
Arbitration Act and the Commercial Courts Act on their heads.
Admittedly. if the amount contained in a foreign award to be
enforced in India were less than Rs 1 crore, and a Single Judge
of a High Court were to enforce such award, no appeal would lie,
in keeping with the object of speedy enforcement of foreign
awards. However, if in the same fact circumstance, a foreign
award were to be for Rs 1 crore or more, if the appellants are
correct, enforcement of such award would be further delayed by
providing an appeal under Section 13(1) of the Commercial
Courts Act. Any such interpretation would lead to absurdity, and
would be directly contrary to the object sought to be achieved by
the Commercial Courts Act viz. speedy resolution of disputes of a
commercial nature involving a sum of Rs 1 crore and over. For
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this reason also, we feel that Section 13(1) of the Commercial
Courts Act must be construed in accordance with the object
sought to be achieved by the Act. Any construction of Section 13
of the Commercial Courts Act, which would lead to further delay,
instead of an expeditious enforcement of a foreign award must,
therefore, be eschewed. Even on applying the doctrine of
harmonious construction of both statutes, it is clear that they are
best harmonised by giving effect to the special statute i.e. the
Arbitration Act, vis-à-vis the more general statute, namely, the
Commercial Courts Act, being left to operate in spheres other
than arbitration.”
13. Given the fact that there is no independent right of appeal under
Section 13(1) of the Commercial Courts Act, 2015, which merely
provides the forum of filing appeals, it is the parameters of Section 37 of
the Arbitration Act, 1996 alone which have to be looked at in order to
determine whether the present appeals were maintainable. Section 37(1)
makes it clear that appeals shall only lie from the orders set out in sub-
clauses (a), (b) and (c) and from no others. The pigeonhole that the High
Court in the impugned judgment has chosen to say that the appeals in
the present cases were maintainable is sub-clause (c). According to the
High Court, even where a Section 34 application is ordered to be
returned to the appropriate court, such order would amount to an order
“refusing to set aside an arbitral award under Section 34”.
14. Interestingly, under the proviso to Section 13(1-A) of the
Commercial Courts Act, 2015, Order 43 CPC is also mentioned. Order
43 Rule(1)(a) reads as follows:
“1. Appeals from orders. An appeal shall lie from the following
orders under the provisions of Section 104, namely-
(a) an order under Rule 10 of Order 7 returning a plaint
to be presented to the proper court except where the procedure
specified in Rule 10-A of Order 7 has been followed;”
This provision is conspicuous by its absence in Section 37 of the
Arbitration Act, 1996, which alone can be looked at for the purpose of
filing appeals against orders setting aside, or refusing to set aside awards
under Section 34. Also, what is missed by the impugned judgment is the
words “under Section 34”. Thus, the refusal to set aside an arbitral
award must be under Section 34 i.e. after the grounds set out in Section
34 have been applied to the arbitral award in question, and after the
Court has turned down such grounds. Admittedly, on the facts of these
cases, there was no adjudication under Section 34 of the Arbitration Act,
1996 all that was done was that the Special Commercial Court at
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Gurugram allowed an application filed under Section 151 read with
Order 7 Rule 10 CPC, determining that the Special Commercial Court at
Gurugram had no jurisdiction to proceed further with the Section 34
application, and therefore, such application would have to be returned to
the competent court situate at New Delhi.
xxx xxx xxx
19. It can be seen that the reasoning in this judgment would have no
application to the facts of the present case. The Division Bench held that
directing Autrix to file an affidavit, enclosing therewith its audited
balance sheets and profit and loss account for the last three years, is
itself an interim order passed under Section 9 of the Arbitration Act,
1996. The further reasoning of the Court that the direction to Antrix to
furnish an affidavit is to aid a future interim order, which would be just
consequential, does not commend itself to us. A step towards an interim
order would not amount to granting, or refusing to grant, any measure
under Section 9 of the Arbitration Act, 1996. The case is also
distinguishable for the reason that, as regards the Bangalore Court,
which cannot proceed further with the matter, the impugned order
therein is really final and would, therefore, also be be appealable under
Section 37. For all these reasons, this judgment is wholly distinguishable
and would not apply to the facts of the present case. We may also advert
to the fact that our judgment in Kandla was delivered on 7-2-2018, and
was missed by the Division Bench in Antrix Corpn. Ltd.8, as the Division
Bench had reserved judgment on 6-12-201719, even though it ultimately
pronounced the judgment on 30-5-20188. The judgment in South Delhi
Municipal Corpn. 12 was decided after reference was made to Kandla²,
resulting in a deposit order being held to be not appealable under
Section 37 of the Arbitration Act, 1996.
20. It is clear, therefore, that the appeals filed in the present case do not
fall within Section 37 of the Arbitration Act, 1996 and are not
maintainable.”
18. In view of the clear cut finding arrived at by the Supreme Court
of India on the issue of maintainability, we find that the present appeal is not
maintainable. Accordingly, the same is dismissed on the ground of
maintainability. For, the appeal is being dismissed on the ground of
maintainability, we do not intend to go into the merits of the case. Still
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further, the petitioner would be at liberty to avail any other remedy, as
admissible in law, if so advised.
(ARUN PALLI) (VIKRAM AGGARWAL)
JUDGE JUDGE
Reserved on: 05.11.2024
Pronounced on: 20.01.2025
vcgarg
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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