Talwandi Sabo Power Limited vs SEPCO Electric Power Construction Corporation

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2016 Supreme(P&H) 1030

IN THE HIGH COURT OF PUNJAB AND HARYANA
[DIVISION BENCH]
Before
The Hon’ble Mr. Justice Mahesh Grover
The Hon’ble Mrs. Justice Lisa Gill
L.P.A. No.150 of 2016 (O&M)
Talwandi Sabo Power Limited & Anr.
v.
SEPCO Electric Power Construction Corporation & Anr.
{Decided on 17/05/2016}

For the Appellants:Mr. Ashwani Chopra, Senior Advocate with Mr. K.S.Nalwa, Ms.Rupa Pathania and Mr. Adhiraj Thind, Advocates.
For the Respondent-1:Mr. M.L.Sarin, Senior Advocate, Mr. Puneet Bali, Senior Advocate with Mr. Tushar Sharma, Mr. Ranjit Prakash, Ms. Ankita Sambyal and Mr. Anshuman Pandey, Advocates.

Headnote:Arbitration--LPA against an order passed u/s 9 of the Act, by single judge before constitution of Arbitral Tribunal is not maintainable.
       (A) Arbitration & Conciliation Act, 1996, S.9--Letter Patent Appeal--Clause 10--Interim Relief--LPA against an order passed u/s 9 of the Act, by single judge before constitution of Arbitral Tribunal is not maintainable--The interim order under Section 9 thus is intended for a brief period and if subjected to Letters Patent would clearly result in the dispute being lost in the maze of litigation frustrating the very object of the Act--Once the Arbitral Tribunal is constituted the parties can seek the necessary relief from the Tribunal as its existence extinguishes the earlier order. (Paras 33 to 36)
       Application under Section 9 of the Act was answered by the learned Single Judge of this Court which would thus be construed to be a Court empowered to pass an original decree against whose orders appeals would lie to the Court authorized by law as per dictate of Section 2(1)(e)(ii)--The Intra Court appeal under clause 10 of the Letters Patent would clearly be divested as an available remedy since the Act specifically provides for an appeal under Section 37 and no other interpretation can be given by reading into it provisions unintended by Legislature--The order under Section 9 of the Act would also not qualify as a judgment and hence appeal under Clause 10 of Letters Patent would not be maintainable as also for the reason that this clause is not applicable to judgments passed in the exercise of Appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction of a Court subject to superintendence of this Court--Section 2(1)(e)(ii) of the Arbitration and Conciliation Act provides the High Court to be a Court of jurisdiction hearing appeals from decrees of courts subordinate to that High Court--Since the definition and power of the court flows from the legislation i.e. a Special Act, clause 10 of the Letters Patent as extracted above would clearly not apply. (Paras 33 to 36)
       (B) Letter Patent Appeal--Clause 10--Test to applied to determine availability of LPA--Held;
       (i) An appeal shall lie “to the Court already established” and the appeal must be regulated by the Practice and Procedure of the Court.
       (ii) High Court cannot be divested of its Letters Patent jurisdiction unless provided for expressly or by necessary intendment by some special statute.
       (iii) Whether the Special Act sets out a self-contained Code in that eventuality, the applicability of the general law procedure would be impliedly excluded.
       (iv) Even if the words “Letters Patent” are missing, but by a reading of the provision, it is clear that all appeals are barred, then the Letters Patent Appeal would be barred.
       (v) If the pronouncement of the Single Judge qualifies as a judgment, then in the absence of any bar created by a statute an appeal shall be under relevant provisions of the Letters Patent of the High Court. (Para 24)

JUDGMENT

Mr. Mahesh Grover, J.:- This Letters Patent Appeal is against the order of the learned Single Judge dated 20.1.2016 wherein directions were given while exercising powers under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) as amended, to order continuance of the interim orders dated 1.12.2015 and 8.12.2015 requiring a bank guarantees to be maintained for a period of three weeks from the date of constitution of an Arbitration Tribunal with liberty to the respondents to seek interim relief by invoking provisions of Section 17 of the amended Arbitration Act.

2. The debate has centered on the issue of maintainability of the L.P.A. against an order passed under Section 9 of the Act as the issues impinging the merits of the dispute would largely be contingent on its acceptance.

3. There would be an inter-play of some of the provisions of the Act which for the purpose of reference, are extracted here below :-

“9. Interim measures, etc., by Court.- (1) A party may, before or during arbitral proceedings or at any time after the making of the atbitral award but before it is enforced in accordance with Section 36, apply to a Court.-

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings ; or

(ii) for an interim measure of protection in respect of any of the following matters namely :-

xxx xxx xxx

(d) interim injunction or the appointment of a receiver ;

(e) such other interim measure of protection as may appear to the Court to be just and convenient,

and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.”

4. The respondents have invoked this provision to seek an interim relief. It is also not in dispute that till the time of hearing of this appeal, the Arbitration Tribunal has not come into existence as there was a failure to agree upon the Third Arbitrator.

5. Section 37 of the Act provides for appeals to be preferred against the orders. It is, therefore, apposite to extract the said provision here :-

“37. Appealable orders.- (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) refusing to refer the parties to arbitration under section 8,

(b) granting or refusing to grant any measure under section 9,

(2) An appeal shall also lie to a Court from an order of the arbitral tribunal —

(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16 ; or

(b) granting or refusing to grant an interim measure under section 17.

(3) 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.”

6. It is the common case of the parties that an appeal certainly lies in terms of Section 37(1)(b) of the Act against an order of the Court granting or refusing to grant any measure under Section 9. Section 37(3) of the Act however, lays down that no second appeal shall lie from an order passed in appeal under this section, but nothing in this section will affect any right to appeal to the Supreme Court. A closer reading of Section 37(1) of the Act reveals an appeal to the “court authorized by law to hear appeals from “original decrees of the court passing the order”.

7. The Court in turn, has been defined in Section 2(e) of the Act which is extracted here below :-

“2. Amendment of Section 2.- In the Arbitration and Conciliation Act, 1996 (26 of 1996) (hereinafter referred to as the principal Act), in section 2,-

(I) in sub-section (1),-

(A) for clause (e), the following clause shall be substituted,namely:-

(e) “Court” means -

(i) in the case of an arbitration other than international commercial arbitration, the principal C

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Judicial Analysis

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2016 Supreme(P&H) 1030

IN THE HIGH COURT OF PUNJAB AND HARYANA [DIVISION BENCH]BeforeThe Hon’ble Mr. Justice Mahesh GroverThe Hon’ble Mrs. Justice Lisa GillL.P.A. No.150 of 2016 (O&M)Talwandi Sabo Power Limited & Anr. v. SEPCO Electric Power Construction Corporation & Anr.{Decided on 17/05/2016}

Cases Referred (10)

Judicial Analysis

IN THE HIGH COURT OF PUNJAB AND HARYANA
[DIVISION BENCH]
Before
The Hon’ble Mr. Justice Mahesh Grover
The Hon’ble Mrs. Justice Lisa Gill
L.P.A. No.150 of 2016 (O&M)
Talwandi Sabo Power Limited & Anr.
v.
SEPCO Electric Power Construction Corporation & Anr.
{Decided on 17/05/2016}