Allahbad High Court
K.B.ASTHANA,T.S.MISRA
Krishnawati Devi - Appellant
Versus
Lala Harjas Mal Misra - Respondent
Decided On : 02/07/1974
ARBITRATION - APPEAL - MAINTAINABILITY - ORDER APPOINTING RECEIVER - NOT APPEALABLE - SECTION 39 OF THE ARBITRATION ACT, 1940.
Fact of the Case:
An application was filed under Section 41 of the Arbitration Act, 1940, for the appointment of a receiver of a dissolved firm. The application was allowed, and a receiver was appointed. The appellants challenged the order of appointment of the receiver by filing an appeal.
Finding of the Court:
The court held that the appeal was not maintainable. It observed that Section 39 of the Arbitration Act, 1940, provides for an appeal against certain orders passed under the Act, but an order appointing a receiver is not one of them. The court further held that the order was passed under Section 41(b) of the Act, which read with the second schedule, confers power on the court to appoint a receiver. Therefore, the provisions of the Code of Civil Procedure could not be taken into aid to contend that the appeal was maintainable.
Issues: Whether an appeal lies from an order appointing a receiver passed under Section 41 of the Arbitration Act, 1940.
Ratio Decidendi: The court held that an appeal does not lie from an order appointing a receiver passed under Section 41 of the Arbitration Act, 1940. The court reasoned that Section 39 of the Act provides for an appeal against certain orders passed under the Act, but an order appointing a receiver is not one of them. The court further held that the order was passed under Section 41(b) of the Act, which read with the second schedule, confers power on the court to appoint a receiver. Therefore, the provisions of the Code of Civil Procedure could not be taken into aid to contend that the appeal was maintainable.
Final Decision: The appeal was dismissed.
T.S. MISRA, J. :- This appeal is directed against the order dated 4th August, 1973, passed by the 1st Additional District Judge, Varanasi, on an application moved by Smt. Lilawati on 30th August, 1971, under Section 41 of the Arbitration Act, for appointment of a receiver of the firm Tilak Raj Krishan Kumar with powers to take over the entire assets of the partnership, including its books of account and to take charge of the place of business of the dissolved firm and also to realise the assets and dues of the firm and discharge its pressing liabilities with the permission of the Court. That application was registered as Misc. Case No. 34 of 1971. It was contested by the present appellants. After hearing the parties and considering the circumstances placed before him, the learned 1st Additional District judge allowed the application and appointed Sri Amar Singh Advocate, receiver of the dissolved firm Tilak Raj Krishna Kumar. He also issued certain directions as contained in the impugned order.
2. At the outset, a preliminary objection was raised with regard to the maintainability of this appeal on the ground that since the impugned order was passed under Section 41(b) read with the second schedule of the Arbitration Act, no appeal would lie under Section 39 of the Act. It was contended that the application for appointment of receiver was moved under Section 41 read with me second schedule to the Arbitration Act. The order passed on that application was an order passed under the Arbitration Act. Section 39 of the Act makes provision for appeal against certain orders mentioned therein. As no appeal lies from an order appointing a receiver, it was said that the present appeal was not maintainable. There is force in this contention.
3. Section 39 of the Arbitration Act hereinafter called the Act lays down that an appeal shall lie from the orders, mentioned therein, passed under the Act and from no others, it nowhere provides for an appeal from an order passed under Section 41 appointing a receiver. Section 41(b) provides that subject to the provisions of the Act and the rules made thereunder, the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the second schedule, as it has for the purpose of, and in relation to any proceedings before the Court. The second schedule enumerates the powers of the Court as contemplated by Section 41, one of the powers being to pass orders for appointment of receiver.
4. In the present case, it is not disputed that a reference to arbitration was pending, even on the date, when the order for appointment of the receiver was passed. It appears that an application under Section 20 of the Arbitration Act was moved by Smt. Lilawati, which was registered as Suit No. 154 of 1971. It pertained to the firm Tilak Raj Krishan Kumar. That application was allowed, the arbitration agreement was ordered to be filed, and two arbitrators were appointed. The matter is said to be pending before the arbitrators. Thus, the reference to arbitration in regard to the said firm is pending. The Court, obviously, therefore, had the power to make an order for the appointment of a receiver. It was actually passed by the Court on contest. That order falls within the scope of sub-clause (b) of Section 41 of the Act. It was, therefore, passed under the provisions of the Act. In view of the provisions of Section 39 of the Arbitration Act, an appeal shall lie from those orders passed under the Act, and from no others, which are specifically mentioned therein. As stated earlier, an order for appointment of receiver is not mentioned anywhere in Section 39 of the Act. Hence, no appeal from the order appointing a receiver would lie.
5. It was, however, urged by the learned Counsel for the appellants that the case would be covered by the provisions of sub-clause (a) of Section 41 of the Arbitration Act, which make the provisio
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