UNION OF INDIA v. MOHINDRA SUPPLY COMPANY

there was a conflict of opinion amongst the High Courts on the question whether an appeal lay under the Letters Patent from an appellate order of a Single Judge in arbitration matters. The l 908 by enacting s. 4 and s. 104( I) preserved the Code of right of appeal under any other time being. The Arbitration Act, 1940 removed all the pro\'isions relating to arbitration from the Code and made comprehensive pro. visions in the Act. Though under the Code of 1908 an appeal ~ did lie under the Letters Patent from an order pa.,cd by a Single Judge in exercise of appellate jurisdiction that was because the po\\'Cr to hear appeals under a special \Vas expressly reserved bys. 4 of the Code. There is no provi>ion in the Arbitration Act, 1940, corresponding to s. 4 of the Code and there is nothing \\·hich prcsr.r\·es the jurisdiction of the High Court under the Letters Patent. Accordingly. the Lctten Patr.nt must he read subject to the provisions of s. 39 of the Arbitration Act. la"" •· l!urrish Chuncler Cho1<·drg '"· Kali Sundari Jlebia, (1882) L.R. 10 I.A. 4, referred to. Crv1L APPEI.r.ATE ,JmnslllCTIO:-< : Civil Appeal No. 112 of 1958. Appeal from the judgment and decree dated the Punjab High Court l\fay 25, 195-1, of L.P.A. )fo. 8~ of I !.l48 . r .Vaunit Lal and T. M. Sen, for the appellant. S. 'I'. Desai, Clwtter Behari ancl A. G. .. Ratn(lparkhi, for the respondent.

1961. September 5. The Judgment of the Court wa8 delivered by SI.ah]. SHArr, ,J.-A dispute arising under a relating to the supply of solidified fuel contract between - - - 3 S.C.R. SUPREME COURT REPORTS 499 )'- ' Messrs. Mohindra Supply Company-hereinafter referred to as tho respondents-and the Governor General of India in Council was referred to arbitra tion of two arbitrators. On March 19, 1946, the arbitrators made and published an award directing the Governor-General to pay to the respondents Rs. 4 7,250/- with interest at 3% from July 17, 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 purposes of this appeal are not material. The Subordinate .Judge refused to set aside the award on the gr\iunds set up and rejected the application. Against the order refusing to set aside the award, the Governor-General preforred to the Lahore High Court an appeal which after the setting up of thfl Dominions of India and Pakistan was transferred to the Circuit Bench of the East Punjab High Court at Delhi.

Falshaw, J., whc heard the appeal set nside the order, because in his "iew 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.IO of the Letters Patent of the High Court of Lahore, which by the High Court (Punjab) Order, 1947 to the East Punjab High Court. Before applied the Appellate Bench, the Govemor-General contended that the appeal under the letters Patent was prohibited by s. 39( 2) of the Indian Arbitra tion 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 the bar contained in P<Ltent, notwithstanding -l. s. 39(2) of the Arbitration Act. After the opinion of the Full Bench was delivered, a Division Bench the appeal on its merits and set aside considered ,; J961 Union of India v.

M ohindra Supply Company Shah J. f 19~1 Union of India v. N oliind<a Sutpl7 OomjJany Shah J. 500 SUPREME COURT REPORTS [1962) the order of Falslrnw, J. The Union of India appeals against the rlecision of the High Court. In this appeal, we arc only concerned with the question whether the appeal urnler cl. 10 of the Letters Patent of the High Court against the onler of Falshaw, .T., was maintainable. The proceedings rcl.iting to arbitration are, since the enactment of the Indian Arbitration Act X of l!H(l, govern1H] hy the provisions of that Act. The Act is a consolida ting anrl amcmling stritute. It repealed the Arbitrn· tion Art of 18()(), Schedule ~ of the Code of Civil Procedure and also chi. (a) to (f) of s. 104(1) of the Corle of Civil Procedure which proYirled for appeals from orders in arbitration proceedings. Thf Act set up machinery for all contract1ml arbitrations and its provisions, subject to certain exceptio1rn, apply also to every arbitration under any other enact ment for the time being in force, as if the arbitra tion were pursuant to an arbitration agreement and as if that'. other enactment were an arbitration agreement, except in so far as the Arhitrntion Act is inconsistent with that. other enactment or with any mies made thereunder.

Section 39 of the Act, which deals with appeals, provides: "( 1) An appeal shall lie from the following orders passed under this Aet (and from no others) to the Court authorised by law to hear appeals from origin:il rlecrces of the Court passin): the order: »ll order- \. - • - (i) superr:erling an arbitration; (ii) on an award stat~cl in the fon· of a sp<'cial case; (iii) modifying a\\"<'\rc.l; (iY) filing or correcting a . refusing file ar • !"· arbitration agreement; 1961 Union of lndi• v. M ohindra Supply Company Shah J. 3 s.C.R. SUPREME COURT REPORTS 5o1 refusing (Y) staying or legal proceedings where 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 sha 11 affect or take away any right to appeal to the Supreme Court.

" The two sub-sections of s. 39 are manifestly part of a single legislative pattern. By sub-s. ( 1 ), the right to appeal is conferred against the speci fied 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 (') held that there is no further right of appeal under the Letters Patent when a Single Judge of the High Court disposee of an appeal undei- s. 39 ( 1) of the Arbitration Act. The sRme view was expressed by the Madras High Court in Radha Krishna Murthy v. Ethirajulu('). In Ilanuma.n Chamber of Commerce Ltd., Delhi v. Jassa Ram Ilira Na.nd (')and Banwari Lal Ram Dev v. The Board of Trustees, Hindu College(') 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 bys. 39(2). In the view of the Lahore and the East Punjab High Courts appeals prohi bited by su b-s. (2) were second appeals, i.e., appe als ur der s.-100" of the Civil Procedure Code and "Intra-court_:appeals" such as appeals under th11 (I) I.L.R. (1952) Born. 570. (3) A.I.R. (1948) Lah. M. (2) LL.R. (1945) Mad. 564. (4) !.L.R. (1948) E.P. 159. - - - - • - ..... - 196; Uffron of lndi1 v M oliindra Supply Compan_v Shah J. li0:2 SUPREME COURT REPORTS (1962] Letters Patent from an order of ~ Single Judge to a Bench of the same Court were not prohi bited. The Madras High Court in a recent judg ment-.llulchand /{eu·al Chand Daya \'. J(issan Das Gridhardass (') has overruled its earlier deci i;ion in Radha Krishna :IIurthy's case and has hold that s. 3!J doals only with appeals from orders passed hy a court. to a superior court and not with appeals "intra-court" and therefore s.

30(2) does not operate to prohibit :m appeal uncler the Lcttern Patent again~t the order of a Single ,Judge exercising appellate in an arbitra tion matter. jurisdiction If the indication inherent Section 3!l(~) expressly prohibits a second appeal from an order passed in appeal under s. 30( I) except an appeal to this court. There is in sub.s. (2) that the expression "second appeal" does not mean an appeal under s. JOO of the Code of Ci\·il procedure. To the interdict of a "second appeal", there is an exception in favour of an appeal to this Court; this Court is not a second but an appeal to appeal. legislature inten<lecl by enacting s. 39(2) nearly to prohibit appeals under s. 100 of the Code of Civil Procedure, it was plainly u11- neecssary to enact an express provision saving appeals to this Court. Again an appeal under s. 3!l( I) lies against an order superseding an awanl or modifying or correcting an award, or filing or refusing to file an arbitration agreement or stay ing or refusing to stay legal proceedings where there is an arbitration agreement or setting aside or refusing to set a.side an award or on an a.ward 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 thc> Arbitration Act. Section I 00 of the Code of Civil Procedure deals with appeals from appel late decrees and not with appeals from appellate (I) r,1961)74L.W.«!BF,B, 1961 Union of India v. M ohindra Supply Compariy Shah]. 3 S.C.R. SUPREME COURT REPORTS 503 ¥ -I orders. If by enacting s. 39(2) appeals context or the circumstances compel appellate decrees were intended to be prohibited, the provision was plainly otiose; and unless in ascribing to the Court will not be justified legislature an intention to enact a sterile clause. In that premise 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 Savdekar, J., in Madhav dass v.

Vithaldas (1) and by Rajamannar, C. J., in Mulchand Kewal Chand Daga v. Kissan Das Gridhar ) and we agree with the learned Judges that dass (2 tho adjective "imports a further appeal, that is, J -- ' numerically second appeal". The problem to which attention must then be directed is whether the right to appeal under the Lettcrn Patent is at all restricted by s. 39, sub-ss. (l) and(2). Clause 10 of the Letters Patent of the High Court, in so far as it is material, provi des: "And we do further ordain that an ap peal shall lie to the said High Court ......•..... ...... from the judgment (not being a ment passed in exercise of appellate juris diction 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 is expressly granted. But the Division Bench Letters. Patent are declared by cl. 37 subject to "4 • the leg1slat1ve power of the Governor-General in Council and also of the Governor-in-Council under (l) J.L.R. [1952] Born. 570, (2) (1961) 74 L.W. 408 F.B, 1961 l/nion of India v. M nhindra Supply C"'71pany Shn\ ]. SUPREME OOURT REPORTS [I 962] the Government of India Act, HH5 am! mav in all respects be amended 01' altered in exercise of legis lative authority. Under s. 39(1), an appeal lies from the orders specified in that sub·scction and legislature has plainly from no others. The expressed itself that the right of appeal against orders passed uncler the' Arbitration Act may be CXl'roised only in respect of certain orders. The right to appeal against other orders is expressly taken away. If by the express provision contained in s.

3!l(l), a right to appeal from a Judgment which may otherwise be a\'ailablo under the LC'tters Patent is restricted, there is no ground for holding that clause (:?) <loes not similarly reotrict the excer cisc of appellate power granted by the letters Patent. If for rea .. ~ons aforementioned the expres sion "second appeal" includes nn appeal under the JAJttcrs Patent, it would be impossible tu hole! that notwithstan<ling the express prohibition, an appeal uncler the Lett.cm Patent from an order 1mssccl in appeal undor sub-s.(l) is compct<,nt. .. The Punjab High Court in Banuwi I.al llc1m !Jev \'. The Bourd of Trustees, llindu College (I) and the Lahore High Court in Ilanuman Chambe" of Commerce Ltd., Delhi \' . .fr1ssa Ram l/ira Nmul \'), helcl that the appeals contemplated by s. 3!l are appeals tu supPrior ccJUrts and not "intm·court appeals" and therefore the right to appeal unckr the Letters Patent was not rcstrictctl by rnb-~s.

(I) and (2). But a littlc_analysis of this argument is likely to exhibit the somewhat startling conse quences. If the appeal contemplated by s. 3!) (1) is only an appeal to a superior court, orclcrs passccl bv u subordinate court decisions whereof arc made ai>pealable to the same court will not be app<>alable at all under the Arbitration AC't,, For instance, under the Bombav Civil Courts Ac:t, certain decisions of Assista; tt J\l(lges arc' maclc appcalable to the District Courts. An Assistant Judge is a· Judge of the District Court and under the Bombay (I) (21 A I. R. 11948) Lah. 64, I. L. R. (194ll) E. P. 159. 1'61 LTnion of India v. M ohindra Supply Company Shah J . .... 3 S.C,R. SUPREME COURT REPORTS 505 Civil Courts Act, appeals against his orders and decrees in certain cases lie to the District Court. If the argument that an appeal under cl. (1) of s.39 means an appeal to a superior court, be accepted, an appeal from an order under s.

39 ( 1) by an .A.ssistant Judge will not lie at all. There are similar provisions in the Civil Courts Acts in the other'.States as well. The qualifying expression "to the court authorised by law to hear appeals from original decrees of the Court passing order" in s. 39 (1) does not import the concept that the appellate court must be distinct and separate from the court passing the order or the decree. The legislature has not so enacted and the context does not warrant such an interpreta tion. The clause merely indicates the forum of appeal. If from the decision of a court hearing a suit or proceeding an appeal will lie to a Judge or more Judges of the same court, by virtue of s. 39 ( l) the appeal will lie from the order passed appellable, to such Judge or Judges of that court. The argument that the right to file an appeal to in arbitration the Supreme Court from orders restricted has proceedings would be seriously in our view no substance.

If an order passed in a proceeding on the original side of the High Court is appealable under s. 39 (1 ), an appeal will lie to a Division Bench of the High Court and from the order passed by the Division Bench, an appeal, by the express provision contained in sub-s. (2) will lie subject to the restrictions contained in the to the relevant articles · of Supreme Court. If the order is not one falling within s. 39 ( 1 ), no appeal will evidently lie. It is true that against an order passed in arbitration proceeding, by a Division Bench of a High Court in an appeal, an appeal to this Court as a matter of right may lie, if the requirements of Art. 133 are fulfilled ; but if the same case is heard by a Single Judge no the Arbitration Act, the Constitution the order 1161 Union of India V. M chindra Supply Cwzrny Shah). \ .50!} SUPREllfE COURT ItEPORTS [l!Ju::!J such appeal will lie. But the right to appeal is a creature of statute; no litigant ha~ an inherent right to app<'al against a decision of a court.

The anomaly relied upon uy the appellant occurs in second appeals, and re\·ision applications as well. If these proceedings ari! heard and disposed of by Single Judges, there is no right of appeal to this Court uut against decisions of Division Benches the right to appeal may be exercised. - Hut it was urged that the interpretation of s. :rn should not be divorced from the setting of kgislativc history, and if regard be had to legislative history and the dictum of the Pri,•y v. Kali in Hnrrish Clmnder Clw11:rlry Council Sundari Debia (') which has been universally followed, in considering the extent of the right of appeal under the Letters Patent, the Court would not ue justified in restricting the right of appeal which was exercisable till HJ40 by litigants against decisions of single Judges of High Courts in arbitra· tion matters from orders p'18sed in appeals. In considerillg the argument whether the right of appeal which was previously exercisable by litigants against decisions of single Judges of the High Courts in appeals from orders passed in arbitration proceedings was intended to be takon away by s.

30 (2) of the Indian Arbitration Act, the Court must proceed to interpret the words of the statute without any predisposition towards tho the Arbitration Act state of the Jaw uefore was enacted. The Arbitration Act of 1!140 is a consolidating and amending statute and is for all purposes a co<ln relating to arbitration. In Indian dealin" with Succcs~ion Act, 18u5, 111 the interpretation of the Privy Council (Il (188~1 L. R. IO l.A.4, 17. )f - - 3 S.C.R. SUPREME COURT REPORTS 507 Narendra Nath Sircar v. Kamlabasini Dasi(') obser ved that a code must be construed according to the natural meaning of the language used and not on the presumption that it was intended to leave the existing law unaltered. The Judicial Committee approved of the observations of Lord Herschell in to the Bank of l!Jngland v. V agliano Brothers('} following effect :- 1961 Union of India v. M ohindra Supply Company Shah]. "l think the proper course is in first instance to examine the language of the statute and to ask what is its natural meaning uninfluenced by any considerations derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was proba bly intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view.

If a statute, intended to embody in a code a particular branch of the law, is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it the law should be ascertained by interpreting the language used instead of, as before, by roaming over a vast number of authorities in order to discover what the law was, extracting it by a minute citical exami- t . . . na 10n o ,, e pr10r ec1s10ns .................. . . d f th The court in interpreting a statute must therefore proceed without seeking to add words which are not to be found in the statute, nor is it permissible in interpreting a statute which codifies a branch of the law to start with the assumption that it was not intended to alter the pre-existing law; nor to add words which are not to be found in the statute, or (I) (1896) L. R. 23, I. A. 18.

(2) [1891] A.C. 107, 144-145, 1111 Union of lnJi4 v. _lf ohtntlra Sup~("! c.:.rnJl•r._., Shah]. ) - • - - SDPRE.ME COURT REPORTS [l!J62] these general conHiderations. 'for which authority is not found in t.hc statute". But we do not proporn to dispose of the arg 1ment mere In our view, ly on even the legislative history viewed in the light of in Hurrish the dictum of Chunder's case, do('S not" afford any adequate justifieation for departing from plain and apparent intemlmcnt of the statute. the Prin• Council Vn<lcr the code of Cfril Procedure of 18ii, a right of a ppoal was conferred upon litigants against certain orders by s. ;)88 and from no other such orders. Clauses (s) and (t) dealt with a right to appeal Jgainst an order under s. 514 superseding an arbitration, and an or<ler un<lC'r s.518, modifying an award. It wnS: enacted in the last paragraph., tlmt the orders pasEed in appeals under the scdion shall be final. it was provided : By paragraph ~ of s.

589, "When an appeal from any order is allow e1l by this chapter, it sh1dl lie to the Court to which an appeal would lie from tho decree in the suit in relation to which such order was made ....... ••. By s. 591 it was provided : "Except as proYided in this Chapter, no appeal shall liP from an order passed by any Court in the cxercisto of its original or appel late jnrisdiction. " The Code of I Sii wa~ replacccl by the Coclc of I 882 but the provisions relating to appeals from orders were re-enact<'<! in identical terms. Before the 1lcc1- 8ion in HurriRh Chnn<lrr'R case, the view was held, especiall~- hy the Bombay and the ~fadras High Court.a, that under el. (15) of the I..et.tcr8 Patent of the High Courts Cal cut ta an appeal from an order passed by a single Judge of a High Court lay only under s. 588 of Bombay, Madras 1961 Uni1111 o.f India v. M ohindra Supply Company Shah]. ' - -- - i :l 1:

U.R. SUPREME COURT REPORTS 50!J ~ of the Code and not otherwise. In Sonba'i v. Ahmed· ) a Full Bench of the Bombay bha'i Habibha'i (1 High Court in construing the provisions of the Letters Patent of the High Court in the light of the provisions of s. 363 of the Civil Procedure Code· that under cl. 15 of the Letters Patent and under the rules of the High Court, an appeal to the High Court from an interlocutory order made by one of the Judges lies only in those cases in which a.n appeal is allowed under the Code of Civil Proce dure and its amending Acts. A similar view wae expressed by the Madras High Court in Achaya v. in Hu.rri~h ). Bnt the Privy Council Ratrandu., (2 Chunder Chowdry v. Kali Simdari Debia (')in a very terse observation expressed a different view, m that case one Ka3siswari executed a will devising a taluk in equal shares to her daughter Clnmdermoni and her cfaughter-in-law Kali Soondari.