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1996 Supreme(Del) 506

High Court Of Delhi
EAST INDIA HOTELS LIMITED - Appellant
Versus
JYOTI PRIVATE LIMITED - Respondent
Decided On : 07/01/1996

An order granting or refusing to grant an injunction passed by a court exercising jurisdiction under the Arbitration Act is not appealable.

Headnote:

ARBITRATION - APPEALABILITY OF ORDERS - INJUNCTION - SECTION 39 OF THE ARBITRATION ACT, 1940 - SECTION 10 OF THE DELHI HIGH COURT ACT, 1966 - SECTION 41 OF THE ARBITRATION ACT, 1940 - SECOND SCHEDULE, ENTRY NO. 4 - ORDER 39 RULES 1-2 CIVIL PROCEDURE CODE - ORDER 43 RULE 1 (R) CIVIL PROCEDURE CODE - LETTERS PATENT.

Fact of the Case:

The appellant filed two suits, one for the appointment of an arbitrator under a loan agreement and the other for the appointment of an arbitrator under a hotel operation agreement. The learned Single Judge allowed both the prayers and appointed the same arbitrator for both references. The appellant filed two appeals, one against the order appointing the arbitrator and the other against the order vacating the interim injunction granted earlier.

Finding of the Court:

The court held that the appeal against the order vacating the interim injunction was not maintainable as it was not one of the six orders listed as appealable orders under Section 39 (1) of the Arbitration Act. The court also held that the order appointing the arbitrator was appealable, but the two references would be treated as separate references and decided separately.

Issues: 1. Whether an appeal lies against an order granting or refusing to grant an injunction passed by a court exercising jurisdiction under the Arbitration Act? 2. Whether the order appointing the arbitrator was appealable?

Ratio Decidendi: 1. An appeal does not lie against an order granting or refusing to grant an injunction passed by a court exercising jurisdiction under the Arbitration Act, as such an order is not one of the six orders listed as appealable orders under Section 39 (1) of the Arbitration Act. 2. The order appointing the arbitrator was appealable, but the two references would be treated as separate references and decided separately.

Final Decision: The appeal against the order vacating the interim injunction was dismissed as not maintainable. The appeal against the order appointing the arbitrator was partly allowed and the two references were directed to be treated as separate references and decided separately.

R. C. Lahoti

( 1 ) THIS order shall govern the disposal of FAO (OS) 115/96 and 116/96 Filed by the same appellant against the same respondents.

( 2 ) SUIT 1808-A/95 was Filed by the appellant for appointment of an arbitrator relying upon a loan agreement dated 8. 8. 1980, wherein the respondent had agreed to pay certain amount to the appellant. Suit No. 622- A/95 was filed by the respondent seeking appointment of an arbitrator relying upon a hotel operation agreement whereun- der the appellant had agreed to carry on hotel business in the premises of the respondent. The learned Single Judge has allowed both the prayers and appointed Mr Justice G. C. Jain, retired Judge of this Court as an arbitrator. All the disputes between the parties under the loan agreement as well as the hotel operation agreement and all the claims and counter-claims of the partics have been REFERRED TO to him. By the same order, the learned Single Judge has rejected I. A. 7955/95 whereon an ex-parte interim injunction was granted in favour of the appellant and I. A. 9753/95 filed by the respondent for vacating the injunction has been allowed. The two appeals have been filed by the appellant feeling aggrieved by both the parts of the order.

( 3 ) FAO (OS) 116/96 is directed against that part of the order by which the arbitrator has been appointed. The grievance of the appellant is that the two references arising out of two suits should not have been made to a single arbitrator and certainly not to be treated together. It is submitted that such an order would irreparably prejudice the appellant. The stand taken by the appellant before the learned single Judge was that the two references should have been to two different arbitrators. However, this appeal need not detain us any longer inasmuch as during the course of hearing both the learned counsel for the two parties have agreed on the proposal that though the two references for adjudication may be dealt with by the same arbitrator, however, they will be treated as two separate references; both will be tried separately and decided separately, though the two awards shall be made by the arbitrator on one day. The order under appeal shall stand modified and clarified accordingly.

( 4 ) IN FAO (OS) 115/96, the subject matter is vacating of injunction granted by the learned single Judge at an earlier stage of the suit. It is submitted by the learned counsel for the appellant that the learned single Judge was not justified in vacating the injunction and should have confirmed the ex parte injunction granted earlier.

( 5 ) AT the very threshold, the learned counsel for the respondent has raised an objection to the maintainability of the appeal submitting that the impugned order has been passed by the learned single Judge exercising jurisdiction under the Arbitration Act, 1940 and the impugned order is not of anature contemplated by sub section (1) of Section 39 of the Act which provides for only six types of orders being appealable and the impugned order being none out of the said six categories, no appeal lies there against. It is submitted by him that in view of the restrictions spelled out by Section 39 of the Arbitration Act, 1940, no appeal lies against an order granting or refusing to grant an injunction passed by a court exercising jurisdiction under the Arbitration Act.

( 6 ) SECTION 39 of the Arbitration Act provides as under :-

"39. Appealable orders- (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 anarbitration 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



























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