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IN THE HIGH COURT OF MADRAS
P.V. Rajamannar, C.J., Veeraswami and Venkatadri, JJ.
Moolchand Kevalchand Daga
Vs.
Kissindoss Girdhardoss
Letters Patent Appeal No. 96 of 1956
Decided On: 11.01.1961
ARBITRATION ACT - S. 39(2) - APPEAL UNDER LETTERS PATENT - COMPETENCY - S. 39(2) OF THE ARBITRATION ACT DOES NOT TAKE AWAY THE RIGHT OF APPEAL CONFERRED BY CL. 15 OF THE LETTERS PATENT.
Fact of the Case:
The respondent filed an application under S. 34 of the Arbitration Act, praying that the court should stay the suit, because the proper remedy of the appellant was to resort to the arbitration of the special panel of arbitrators constituted by the Madras Yarn Merchants Association.
Finding of the Court:
The court held that the suit was based only on a claim arising out of a promissory note which had remained unpaid and it did not in any way relate to the contract between the parties.
Issues: Whether S. 39(2) of the Arbitration Act takes away the right of appeal conferred by Cl. 15 of the Letters Patent.
Ratio Decidendi: The court held that S. 39(2) of the Arbitration Act does not take away the right of appeal conferred by Cl. 15 of the Letters Patent. The court reasoned that S. 39(2) only prohibits a second appeal from an order passed in appeal under S. 39(1) of the Act. An appeal under Cl. 15 of the Letters Patent is not a second appeal within the meaning of S. 39(2).
Final Decision: The court allowed the appeal and restored the order of the learned City Civil Judge dismissing the application.
Rajamannar, C.J.
(1) This appeal originally came before a Division Bench of this court. A preliminary objection was taken on behalf of the respondent that the appeal was incompetent. The ruling of this court in Radhakrishnamurthy v. Ethirajulu Chetti and Co., ILR 1945 Mad 564 : (AIR 1945 Mad 184), directly supported the preliminary objection. But, after some argument, it was considered that decision required reconsideration. Hence, this reference to a Full Bench.
(2) The appeal purports to be filed under Cl. 15 of the Letters Patent against the judgment of Ramaswami, J. In C. M. A. No. 531 of 1954. That appeal was against an order of the City Civil Court, dismissing an application filed by the respondent under S. 34 of the Arbitration Act for stay of a suit (O. S. No. 538 of 1954) on the file of the City Civil Court. Section 39(1) inter alia provider for an appeal form an order staying or refusing to stay legal proceedings where there is an arbitration agreement (cl. (V)).
The question is whether an appeal under the Letters Patent is maintainable against the order of Ramaswami, J. It was not contended before us on behalf of the respondent that the order of Ramaswami, J. Was not a judgment within the meaning of Cl. 15 of the Letters Patent. Prima facie, thererfore, this appeal would be competent. But the respondent's contention is that S. 39(2) of the Arbitration Act prohibits this appeal under the Letters Patent. That provision runs as follows :
"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 appeal to the Supreme Court."
As mentioned above, the preliminary objection is supported by the decision in ILR (1945) Mad 564 :(AIR 1945 Mad 184), the material passage form which has already been extracted in the order of reference. Clause 44 of the Letters Patent runs thus :
"And we do further ordain and declare that all the provisions of these our Letters Patent are subject to the legislative powers of the Governor General in Legislative Council, and also the......... Governor-General under S. 71 of the Government of India Act, 1915, and also of the Governor-General, in cases of emergency under S. 72 of that Act, and may be in all respects amended and altered thereby."
(3) The learned Judge in ILR (1945) mad 564 : AIR 1945 Mad 184, took the view that, as the Indian Arbitration Act was an Act of the Central Legislature, the provisions of S. 39 should prevail, with the result that sub-sec. (2) of Sec. 39 would take away the right of appeal conferred by Cl. 15 of the Letters Patent. This decision was followed by another Division Bench in South India Co-operative Insurance Society Ltd. V. Bapiraju, AIR1955Mad694 . Krishnaswami Nayudu, J. Dealing with this Point, construed the second appeal contemplated under S. 39(2) as a further appeal and not a second appeal under S. 100, C.P.C.
The same view was taken by the Bombay High Court in Madhavdas Devidas v. Vithaldas Vasudeodas, AIR1952Bom229 . In this decision, unlike the decisions of our Court, the question has been discussed at some length.bavdekar, J. Who delivered the judgment on behalf of the Division Bench, referred to the sharp difference of opinion between our court in ILR (1945) Mad 546 : AIR 1945 Mad 184 and the Lahore and East Punjab High Court, which had taken a contrary view in Hanuman Chamber of Commerce v. Jassaram Hira Nand, AIR 1948 Lah 64 and Banwari Lal v. Hindu College Delhi, AIR 1949 EP 165. It may be mentioned that the decision in AIR 1948 Lah 64, affirmed by a Full Bench of the East Punjab High Court in Mohindra Supply Co., Kashmere Gate, Delhi v. Governor-General in Council,.
After setting out the two possible interpretations which could be placed on the words "second appeal" the learned Judge refused to accept the interpretation, according to which the class of appeals contemplated would be appeals under S. 100, C.P.C. "Second appeal" is a technical expression to denote an
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