IN THE HIGH COURT OF DELHI
Manmohan Sarin and Manmohan, JJ.
Canbank Financial Services Ltd.Appellants
Versus
Haryana PetroChemicals Ltd. and Anr.Respondent
FAO (OS) No. 71 of 2006
Decided On: 20.05.2008
Section 37 - Application for referring the disputes raised in the suit by the Appellant/plaintiff to arbitration--Embargo on appeals in Section 37 is an absolute and categorical--Even an appeal under Clause 10 of Letters Patent would not be maintainable against an order referring the parties to arbitration r--Appeal dismissed as not maintainable.
Manmohan, J.
1. The Appellant has filed the present first appeal being FAO (OS) No. 71/2006 under Order XLIII read with Order XLIIA read with Section 10 of Delhi High Court Act, 1966, against the order dated 29th August, 2005 passed by the learned Single Judge of this Court. By way of impugned order, the learned Single Judge has allowed the Respondent No. 1s application for referring the disputes raised in the suit by the Appellant/Plaintiff to arbitration. In fact, the learned Single Judge specifically directed, "that the parties should take recourse to arbitration and the Arbitrators be appointed in terms of the Arbitration Clause."
2. The learned Counsel for the Appellant contends that the Plaintiff is dominus litus and has the right to choose the parties and the forum to enforce the rights legally available to him. He further contends that the Single Judge failed to appreciate that the Respondent/Defendant No. 2 is neither a signatory nor a party to the Master Lease Agreement or the supplementary agreement incorporating the Arbitration Clause. The Appellants counsel also relied on the judgment of the apex Court in Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya reported in : [2003] 3 SCR558 to contend that there can be no splitting of causes of actions or parties. He further states that even though today Plaintiff/Appellant may have no relief against Defendant/Respondent No. 2 yet the Single Judge failed to appreciate that the subject matter of the suit has to be seen at the time when the Appellant/Plaintiff instituted the suit. According to the counsel for the Appellant, the subject matter of the suit was not the subject of the Arbitration Agreement, at the time of institution of the suit.
3. The learned Counsel for the Respondent No. 1 raises a preliminary objection to
the maintainability of the present appeal. He contends that in view of Section 37(1) of the Arbitration and Conciliation Act, 1996, it is not open to the Appellant to file the present appeal before a Division Bench of this Court. He submits that the present appeal is not maintainable as the two contingencies in which appeal is maintainable as provided under Sub-sections (a) & (b) of Section 37(1) are admittedly not there namely (a) it is not an order granting or refusing to grant any measure under Section 9 or (b) setting aside or refusing to set aside an arbitral award under Section 34. Emphasis is laid by Respondents counsel on the use of words "and from no others" to say that appeal in all other cases is excluded. Section 37(1) of the Arbitration and Conciliation Act, 1996 is reproduced hereinbelow for ready reference.
37(1) An appeal shall lie from the following orders (and from no others)
to the Court authorized 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."
4. The learned Counsel for Appellant submits that the act of allowing Section 8 application tantamounts to a plaint being rejected and thereforee, Appellant could maintain this appeal under Section 96 of the Code of Civil Procedure Code. The Appellants counsel further submits that the impugned order being in the nature of a judgment deciding valuable rights of the Plaintiff to maintain a civil suit is challengeable under Section 10 of the Delhi High Court Act, 1966. In this connection the Appellant also relies upon judgment of the Honble Supreme Court rendered in Shah Babulal Khimji v. Jayaben D. Kania reported in AIR 1981 SCC 1786.
5. To our mind the embargo on appeals in Section 37 is an absolute and categorical one. Moreover, in the instant case the Arbitration and Conciliation Act, 1996 which is a special act dealing with the arbitrations, specially limits the extent of judicial intervention inasmuch as it provides that no judicial authority shall intervene except where so provided. Section 5 of the Arbitra
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