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SUPREME COURT OF INDIA
DIPAK MISRA, AMITAVA ROY, JJ.
MAHANAGAR TELEPHONE NIGAM LTD. – Appellant
VERSUS
M/S. APPLIED ELECTRONICS LTD. – Respondent
CIVIL APPEAL NO(S). 11584 OF 2016 (Arising out of SLP(C) Nos. 2865 OF 2015)
Decided On : 24-11-2016
(2002) 5 SCC 510; (2007) 1 SCC 467; (2004) 11 SCC 672; (2011) 8 SCC 333; 2016 (9) SCALE 427 – Relied upon
Arbitration Appeal No. 12 of 2010; (2005) 8 SCC 618; (2004) 3 SCC 214 – Referred
(2004) 3 SCC 250 – Distinguished
(b) Arbitration and Conciliation Act, 1996 – Section 5 – The Act is a complete Code and in terms of section 5 no other provision can be attracted in matters of arbitration – Application of CPC is not conceived of – Naturally cross-objection cannot be entertained. (Para 28)
(c) Administration of justice – Judicial propriety – Court differing with (2004) 3 SCC 250 – Matter referred to larger Bench. (Para 29)
Facts of the case:
A Division Bench of the High Court placing reliance on Satpal P. Malhotra & Ors. vs. Puneet Malhotra & Ors., Arbitration Appeal No. 12 of 2010 decided on 14th June, 2013 that has followed the decision in MCD vs. International Security & Intelligence Agency Ltd., (2004) 3 SCC 250 has expressed the view that the Code of Civil Procedure, 1908 would be applicable to the proceedings under the Arbitration and Conciliation Act, 1996. While expressing the view that the CPC is applicable to an appeal preferred under Section 37 of the Act, the High Court has in the impugned order opined that the cross objection preferred by the respondent herein was maintainable and accordingly entertained the same after condoning the delay.
Finding of the Court:
Application of CPC is not conceived of. Naturally cross-objection cannot be entertained.
Result: Matter referred to larger Bench.
JUDGMENT
Dipak Misra, J.
Leave granted.
2. The present appeal, by special leave, calls in question the legal tenability of the order dated 28th July, 2014 passed by the High Court of Delhi wherein a Division Bench in CM No. 15530 of 2013 placing reliance on Satpal P. Malhotra & Ors. vs. Puneet Malhotra & Ors., Arbitration Appeal No. 12 of 2010 decided on 14th June, 2013 that has followed the decision in MCD vs. International Security & Intelligence Agency Ltd., (2004) 3 SCC 250 has expressed the view that the Code of Civil Procedure, 1908 (for short 'the CPC') would be applicable to the proceedings under the Arbitration and Conciliation Act, 1996 (for short ‘the 1996 Act). Be it stated, while expressing the view that the CPC is applicable to an appeal preferred under Section 37 of the Act, the High Court has in the impugned order opined that the cross objection preferred by the respondent herein was maintainable and accordingly entertained the same after condoning the delay.
3. Assailing the said order, it is submitted by Mr. N.K. Kaul, learned Additional Solicitor General, appearing for the appellant, that the scheme of the 1996 Act does not grant any space or make any provision as regards the applicability of CPC unlike the Arbitration Act, 1940 (for short 'the 1940 Act') and in the absence of any express provision, the legislative intendment is not to make it applicable. It is his further submission that Sections 5, 34, 37 and 50 of the 1996 Act constitute a complete code and it clearly provides the measures for adjudging or deciding the validity of an award or even to adjudge the defensibility of an interim order. It is urged by him that recourse to any other mode under the CPC to challenge an order or the award passed under the Act would create an anomalous situation and frustrate the intention of the legislature.
4. Learned senior counsel would submit that the pronouncement in the ITI Ltd. vs. Siemens Public Communications Network Ltd., (2002) 5 SCC 510 holds that the applicability of CPC is not prohibited and, therefore, Section 5 of the 1996 Act would not be attracted and the High Court can exercise the revisional power to rectify an order passed by the District Court, but the said verdict runs counter to the decision of the larger Bench rendered in SBP & Co. vs. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618 and other decisions, namely, Pandey & Co. Builders (P) Ltd. vs. State of Bihar & Anr., (2007) 1 SCC 467 and Fuerst Day Lawson Ltd. vs. Jindal Exports Ltd. (2011) 8 SCC 333. According to Mr. Kaul, the aggrieved person can prefer an appeal under Section 37 exercising his independent right but cannot be allowed to take recourse to file cross objection to advance his right that has been denied to him by the Court in exercise of power under Section 34 of the 1996 Act. For the said purpose he has drawn immense inspiration from the authority in Jamshed Hormusji Wadia vs. Board of Trustees, Port of Mumbai & Anr., (2004) 3 SCC 214.
5. Mr. Arun Kumar Varma, learned senior counsel appearing for the respondent, per contra, would contend that the decision rendered in ITI Ltd. (supra) is absolutely unquestionable and a binding precedent on this Court. According to him, the principle stated in Jamshed Hormusji Wadia (supra) is not applicable, inasmuch as it deals with an appeal preferred after obtaining special leave under Article 136 of the Constitution. It is further propounded by him that the High Court of Bombay as well as the High Court of Delhi has correctly relied on the principle enunciated by the three-judge Bench in International Security Inteligence Agency Ltd. (supra).
6. In course of hearing, we have been apprised that the decision rendered by the High Court of Bombay has been challenged before this Court and leave has been granted, and the matter is pending for adjudication. However, we intend to express our view with regard to the submissions advanced at the Bar. The statement of objects and reasons of the 1996 A
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