JUDGMENT
V. K. Gupta, J.
1.This appeal has been filed by the Union of India and General Manager, Eastern Railway against the Judgment dated 25th September, 1998 passed by the learned single Judge of this Court in AP No. 161 of 1998 whereby, applications filed under sections 10 and 11 of the Arbitration and Conciliation Act. 1996 (1996 Act for short) have been allowed and the learned single Judge has directed that the matter be referred to the Chief Justice of the High Court for appointing 5 several-sole Arbitrators in terms of section 11 of 1996 Act in respect of the Contract Agreements relating to the jurisdiction of 5 Courts at Howrah, Burdwan, Bolpur, Suri and the High Court of Calcutta.
2. At the very outset the respondents in the appeal have raised the basic question of maintainability of the appeal, relying upon section 37 of 1996 Act. The contention of the respondents is that in view of the clear language employed in section 37 of 1996 Act, no appeal lies against an order passed under section 11 of the Act since section 37 is restrictive with respect to the filing of appeals and is specifically confined to appeals only in respect of such specific types of orders as are mentioned therein. Analogy is drawn to section 39 of 1940 Act.
3. In order to understand and appreciate the basic objection regarding the maintainability of the appeal, we have to look to section 37 of the Act which reads thus :
“37. Appeal 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) granting or refusing to grant any measure under section 9.
(b) setting aside or refusing to set aside an arbitral award under section 34.
(2) An appeal shall also lie to a Court from order of the arbitral tribunal.
(a) accepting the plea referred to in sub-section (2) or sub-section (3) or section 16; or
(b) granting or refusing to grant as Interim measure under section 17.
(3) 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 appal to the Supreme Court.
4. A bare look at section 37 clearly suggests that only two kinds of orders passed by a Court are appealable to a Court authorised by law to hear appeals and those two orders are mentioned in Clauses (a) & (b) of subsection (1) of section 37, viz. granting or refusing to grant any measure under section of the Act or setting aside or refusing to set aside an arbitral award under section 34 of the Act. In the very opening part of section 37, namely in sub-section(1) the expression “and from no others” clearly suggests the legislative Intent that no appeal other than those relating to the orders mentioned in section 37 shall lie before an Appellate Court
5. When confronted with this situation the learned Advocate for the appellant submitted that even if the appeal is not maintainable under section 37 of 1996 Act, it lies under Clause 15 of the Letters Patent.
6. A four Judge Bench of the Supreme Court in the Case of Union of India v. Mohtndra Supply Co. while dealing with similar question regarding the maintainability of appeal under section 39 or Arbitration Act, 1940 vis-a-vls Letters Patent held as under :
“The problem to which attention must then be directed is whether the right to appeal under the Letters Patent is at all restricted by section 39, sub-sections (1) and (2). Clause 10 of the Letters Patent of the High Court, in so far as it is material, provides:
“And we do further ordain that an appeal shall He to the said High Court ….. from the judgment (not being a Judgment passed in exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate Jurisdiction by a Court subject to the superintendence of the said High Court and not being an order made in the exercise of revisional Jurisdiction…..) of one Judge of the High Court…..”
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. Under section 39(1), an 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 to 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.”
7. It may be worthwhile to mention that Clause 37 of Letters Patent of Punjab is in par! materla to Clause 44 of our Letters Patent. Mohlndra Supply Co. came to be noticed in a later Judgment of the Supreme Court in the Case of State of West Bengal v. Gourangalal Chatterjee wherein their Lordships held as under:–
“Section 39 of the Arbitration Act came up for consideration in Union of India v. Mohlndra Supply Co. The Court after going into detail and examining various authorities given by different High Courts held that no second appeal lay under section 39(2) against a decision given by a learned single Judge under section 39(1). In respect of the Jurisdiction under Letters Patent the Court observed 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.”
8. Learned Advocate appearing for the appellants relied upon section 5 of 1996 Act and submitted that since the disputes in this case had arisen prior to the coming into force of 1996 Act, 1996 Act has no applicability
and that the provisions or Arbitration Act, 1940 shall have application and therefore the order passed by the learned single Judge is appealable. Section 85 of 1996 Act reads thus :
“85. Repeal and savings
(1) The Arbitration (Protocol and Convention) Act. 1940 and the Foreign Awards (Recognition and Enforcement) Act, 1961 are hereby repealed.
(2) Notwithstanding such repeal
(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act conies into force:
(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or Issued under this Act.”
9. Since applicability of Arbitration Act 1940, despite its repeal by section 85 of 1996 Act has been made conditional with respect to such arbitral proceedings which had commenced before 1996 Act came Into force, we have to look to section 21 of 1996 Act to find out about the stage and the date as to when in respect of a particular dispute the arbitral proceedings shall be considered to have commenced. Section 21 reads thus:–
“21. Commencement of arbitral proceedings’ Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.”
10. Learned Advocate appearing for the appellants referred to the decision of the Supreme Court in the case of Shetty’s Constructions Co. Put. Ltd. v. Konkan Railway Construction and Another wherein Their Lordships held as under :
“A mere look at sub-section (2)(a) of section 85 shows that despite the repeal of Arbitration Act, 1940, the provisions of the said enactment shall be applicable in relation to arbitration proceedings which have commenced prior to the coming into force of the new Act. The new Act came into force on 26-1-1996. The question therefore, arises whether on that date the arbitration proceedings in the present four suits had commenced or not. For resolving this controversy we may “turn to section 21 of the new Act which lays down that unless otherwise agreed to between the parties, the arbitration suit in respect of arbitration dispute commenced on the date on which the request for referring the dispute . for arbitration is received by the respondents. Therefore, it must be found out whether the requests by the petitioner for referring the disputes for arbitration were moved for consideration of the respondents on and after 26-1-1996 or prior thereto. If such requests were made prior to that date, then on a conjoint reading of section 21 and section 85(2)(a) of the new Act, it must be held that these proceedings will be governed by the old Act. As soon from the aforenoted factual matrix, it at once becomes obvious that the demand for referring the disputes for arbitration was
made by the petitioners in all these cases months before 26-1-1996, in March and April 1995. These suits were obviously filed prior to 26-1-1996 and hence they had to be decided under the old Act of 1940. This preliminary objection, therefore, is answered by holding that these four suits will be governed by the Arbitration Act, 1940 and that how the High Court in the impugned Judgments has implledly treated them.”
11. In order to properly understand the true Import of the argument raised by the learned Advocate for the appellant about the non-appilcability of 1996 Act and the application of Arbitration Act 1940, we have to actually refer to the Judgment of the Supreme Court in the case of The Secretary to the Government of Orissa and Another v. Sarbeswar Rout wherein Their Lordships while referring to the commencement of arbitral proceedings in terms of Arbitration Act 1940 held as under :
“So far an action in a Court of law is concerned, it must be held that it commences on the filing of a proper claim in accordance with the prescribed procedure before the authority empowered to receive the same. If a plaint, drawn up in accordance with the prescribed law. Is filed before a Civil Court, the suit must be deemed to have been Instituted on that date, and not on a later dated when the Court takes up the plaint and applies its mind. Ordinarily the plaint is examined by stamp reporter of the Court who scrutinises whether proper court-fee has been paid or not, and then makes a report. The Court generally takes up the plaint only later. Similar is the position with respect to other applications and memoranda of appeals. It must, therefore, be held that the proceeding is Instituted when the claimant files his claim. We do not see any reason to apply a different approach in the case of an arbitration proceeding. As soon as the arbitrator Indicates his willingness to act as such, the proceeding must be held to have commenced. This aspect did not arise for decision in the cases Executive Engineer (Irrigation) v. Abhaduta Jena, or Gujarat Water Supply and Sewerage Board v. Unique Erectors (Gujarat) (P) Ltd., and no assistance from them can be taken in the present appeal. The learned counsel for the appellant is, therefore, right in saying that the arbitrator in the present case, by directing on 20-4-1982 the parties to file their statements of claim, clearly Indicated that he accepted the offer to arbitrate. The proceedings must, therefore, be deemed to have been Instituted not later than this date. We accordingly hold that the award so far it allowed Interest for the period after 20-4-1982, is without Jurisdiction and must excluded. The appeal is accordingly allowed in part. The parties shall bear their own costs.
Appeal partly allowed.”
12. In order therefore to find out as to whether arbitral proceedings as indicated in section 85 of 1996 Act had commenced prior to the coming into force of 1996 Act we have to find out whether prior to 26th January 1996 when 1996 Act had come into force, in terms of the ratio laid down in the Judgment of the Supreme Court in Sarbeswar Rout (supra) the Arbitrators had rendered upon the reference by Indicating their willingness to act as such. Applicability of section 21 of 1996 Act is not relevant in
our case for determining the commencement of arbitral proceedings because section 21 of 1996 Act relates to and deals with the commencement of arbitral proceedings under 1996 Act. The definition of “commencement of arbitral proceedings” as occurring in section 21 of 1996 Act will have a bearing only to a point of time after 1996 Act had come into force and will have no relation to the commencement of arbitral proceedings at a point of time before 1996 Act had come into force. We are saying so because section 21 does not deal with the scope of commencement of arbitral proceedings under Arbitration Act 1940. On the other hand when section 85 of 1996 Act talks about the commencement of arbitral proceedings before the coming into force of 1996 Act, it clearly means that the arbitral proceedings should have commenced before the coming into force of 1996 Act, in the manner such commencement is understood under the Arbitration Act, 1940. The expression used in section 85, viz. “which commenced before this Act came into force” clearly and conclusively suggests that the principles governing the scope of commencement of arbitral proceedings as were applicable under 1940 Act were to be applied for understanding as to whether 1996 Act would have repealed 1940 Act with respect of such proceedings or not. We are therefore clearly of the opinion that section 21 of 1996 Act will have no manner of application to decide and determine whether the arbitral proceedings had commenced before the coming into force of 1996 Act or not. We are saying so far a very logical and valid reason. It arbitral proceedings as contemplated under the Arbitration Act, 1940 had commenced before the coming Into force of 1996 Act, in terms of section 85 thereof, this Act will have no application and the provisions of the arbitration Act 1940 will have applicability. But if the proceedings in terms of and as contemplated under the Arbitration Act 1940 had not commenced before the coming Into force of 1996 Act, undoubtedly 1996 Act would apply. With utmost respect therefore we have no hesitation in saying that Their Lordships of the Supreme Court in the case of Shetty’s Construction(P) Ltd. , while noticing section 21 of 1996 Act had no occasion to deal with this particular aspect of the matter, peculiar to the facts of our case because of the claim of the appellants that the provisions of Arbitration Act 1940 are attracted in this Case. On the other hand the judgment by a larger Bench of three Hon’ble Judges in the Case of Sarbeswar Rout (supra) is apposite to this case and the ratio as laid down in Para 8 of the Judgment regarding the stage when arbitral proceedings are deemed to commence under the Arbitration Act 1940 is fully applicable to the facts of our case.
13. In the aforesaid legal backdrop therefore if we examine the factual matrix of this case we find that at no point of time prior to the coming into force of 1996 Act, in the light of law laid down by Sarbeswar Rout (supra) the arbitral proceedings ever commenced in the sense that Arbitrators ever appointed had ever Indicated their willingness to act as such or had ever entered upon any reference. In that view of the matter therefore, we are clearly of the view that arbitral proceedings not having commenced under the Arbitration Act 1940 before 26th January, 1996 in any manner whatsoever, the provisions of the Arbitration Act 1940 cannot be held attracted in this case and therefore the present appeal cannot be held to be one under section 39 of the Arbitration Act 1940 also. In other words
therefore, when we say that what we mean is that the 1996 Act is applicable in our case and therefore, section 37 of that Act being a clear bar, the appeal is held not maintainable. The same accordingly is dismissed but without any order as to costs.
P. K. Sen, J.
I agree.
Later.
Let xerox copy of this Judgment, duly counter-signed by the Assistant Registrar of this Court be given to the parties upon their undertaking to apply for and obtain certified copy of the same upon usual undertakings.
14. Appeal dismissed