IMPORTANT POINT
In an appeal under Section 39 of Arbitration Act, 1940, a respondent can file cross objections under Order 41 Rule 22 CPC 1908 but if that appeal is dismissed as not maintainable the cross objections shall also fail and cannot be heard or decided on merits.

Headnote:(i) Arbitration Act, 1940-Sections 39 and 41-Appealable orders and procedure and power of Court-C.P.C. 1908-Order 41 Rule 22-Hearing of cross objections in an appeal filed by respondent under Section 39-Was not maintainable and dismissed by D.B.-Whether a respondent has a right to file cross objections?
       Held : A bare reading of these provisions show that in all the appeals filed under Section 39, the provisions of the Code of Civil Procedure, 1908 would be applicable. This would include the applicability of Order 41 including the right to take any cross objection under Rule 22 thereof to appeals under Section 39 of the Act. (Para 14)
       Held also : We have, therefore, no doubt in our mind that right to take a cross objection is the exercise of substantive right of appeal conferred by a statute. Available grounds of challenge against the judgment, decree or order impugned remain the same whether it is an appeal or a cross-objection. The difference lies in the form and manner of exercising the right, the terminus a quo (the starting point) of limitation also differs. Para 18)
       But held : Once we hold that by taking cross objection what is being exercised is the right of appeal itself, it follows that the subject-matter of cross objection and the relief sought therein must conform to the requirement of Section 39(1). In other words, a cross objection can be preferred if the applicant could have sought for the same relief by filing an appeal in conformity with the provisions of Section 39(1) of the Act. If the subject-matter of the cross objection is to impugn such an order which does not fall within the purview of any of the categories contemplated by clauses (i) to (vi) of sub-section (1) of Section 39 of the Act, the cross objection shall not be maintainable. (Para 20)
       (ii) Arbitration Act, 1940-Section 39-Appealable orders-Cross objections in an appeal under Section 39-Appeal under Section 39 was not maintainable and was dismissed-Whether cross objections must be heard and decided on merits? (No)-High Court taking this view-Whether correct? (Yes)-Appeals dismissed.
       Held : To put it briefly, if the Appellate Court forms an opinion that the original appeal itself was incompetent or not maintainable as it was filed against an order not falling within one of the clauses (i) to (vi) of sub-Section (1) of Section 39 then the cross objection shall also fall to the ground and cannot be adjudicated upon on merits. It has to be remembered that law of limitation operates with all its rigour and equitable considerations are out of place in applying the law of limitation. The cross-objector ought to have filed appeal within the prescribed period of limitation calculated from the date of the order if he wished to do so. Having allowed that opportunity to lapse he gets another extended period of limitation commencing from the date of service of the notice of the appeal enabling him putting in issue for consideration of the Appellate Court the same grounds which he could have otherwise done by way of filing an appeal. This extended period of limitation commences from the date of service of the notice of appeal and such notice ought to be in a valid or competent appeal. (Para 21)
       Held consequently : The original appeal filed by the respondents herein was found to be not maintainable as not covered by any of the clauses (i) to (vi) of sub-Section (1) of Section 39 of the Act. It was dismissed as incompetent. The question of the memo of appeal filed in the High Court by the appellants herein being treated as cross objection and being taken up for hearing on merits does not arise. Independently treated as an original appeal the same was held to be hopelessly barred by time as the delay was not explained satisfactorily. On this aspect we are not persuaded to take a view different from the one taken by the High Court. The appeal filed in the High Court by the appellants herein has been rightly held liable to be dismissed as time-barred and is not available to be heard and decided as cross objection in view of the original appeal filed in the High Court by the respondents herein having failed as incompetent. The appeals are dismissed. Costs easy. (Paras 24 and 25)

JUDGMENT

R.C. Lahoti, J.-Leave granted in both the SLPs.

2. The respondent-International Security and Intelligence Agency Ltd. entered into a contract with the Municipal Corporation of Delhi whereby the former undertook to provide security services etc. to the latter. The agreement contained an arbitration clause obligating the parties to have the disputes arising between them and referable to the contract determined by reference to arbitration under the provisions of the Arbitration Act, 1940, hereinafter the Act , for short.

3. It appears that originally when the agreement was entered into between the parties the respondents were a sole proprietory concern and the appellant No. 1 was an institution known as Delhi Development Authority (Slum Wing). Subsequently, the respondents, the sole proprietory concern, was taken over by a private limited company as the respondents presently are while the DDA (Slum Wing) was taken over by the Municipal Corporation of Delhi. Whether or not the arbitration clause incorporated in the contract entered into between the parties as they were then, would be binding on and available to be invoked by the present parties, was the subject matter of controversy raised by the appellants but we need not enter into the details thereof inasmuch as that is irrelevant for adjudicating upon the neat questions of law arising for decision in these appeals.

4. Disputes arose between the parties and on a petition under Section 8 of the Act filed by the respondents, the Court directed the same to be determined through arbitration by a retired Judge of the High Court. The order of the Court appointing the arbitrator and referring the disputes for determination by him achieved a finality as the appellants did not file any appeal thereagainst and both the parties submitted to the jurisdiction of the arbitrator. On 14.3.1997, the arbitrator gave an award. The award is a non speaking one. The arbitration agreement between the parties does not require the arbitrator to make a reasoned award. The respondents filed an application under Section 14 of the Act for making the award a rule of the Court. On 26.5.1997, objections were filed by the appellants seeking setting aside of the award. Though the objection petition is styled as one under Sections 30 and 33 (both) of the Act, a perusal of the contents of the objection petition shows that all the objections raised therein fall within the scope of Section 30 of the Act. During the pendency of the hearing on the said objection petition, on 20.1.2000 the appellants filed another objection petition styled as one under Section 33 of the Act wherein for the first time a plea was raised that so far as the respondents company is concerned it was not a party to the contract and therefore appointment of arbitrator at its instance and all the subsequent proceedings upto the date of making of the award were without jurisdiction and nullity and were liable to be adjudged so. By judgment dated 17.1.2001, the Court directed the objection raised on behalf of the appellants to be dismissed and the award to be made a rule of the Court. A decree in terms of the award as upheld by the judgment was later drawn up and dated as 17.1.2001.

5. On 20.2.2001, the respondents moved an application seeking review of the judgment. The judgment and the decree drawn up did not award future interest on the decretal amount to the respondents and the only relief sought for in the review petition was to suitably modify the operative part of the judgment and the decree so as to include therein a direction for payment of interest from the date of decree till realization of the decretal amount. On 25.9.2001, the learned single Judge directed the review petition to be dismissed.

6. On 8.10.2001, the respondents filed an appeal before the Division Bench of the High Court feeling aggrieved by the judgment and decree dated 17.1.2001. Condonation of delay in filing the appeal by excluding the time lost in prosecuting

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2003 Supreme(SC) 148

IMPORTANT POINTIn an appeal under Section 39 of Arbitration Act, 1940, a respondent can file cross objections under Order 41 Rule 22 CPC 1908 but if that appeal is dismissed as not maintainable the cross objections shall also fail and cannot be heard or decided on merits.

Cases Referred (7)

IMPORTANT POINT
In an appeal under Section 39 of Arbitration Act, 1940, a respondent can file cross objections under Order 41 Rule 22 CPC 1908 but if that appeal is dismissed as not maintainable the cross objections shall also fail and cannot be heard or decided on merits.