1. Challenge to the maintainability of a Letters Patent Appeal against an order condoning delay in filing a petition to set aside an arbitral award under Section 34, Arbitration Act. (Para 1 , 2 , 3 , 4 , 5 , 6 )
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2017 Supreme(SC) 379
SUPREME COURT OF INDIA
Dipak Misra, A.M.Khanwilkar, JJ.
Union of India – Appellant
Versus
M/S. Simplex Infrastructures Ltd. – Respondent
CIVIL APPEAL NOS. 4892-4893 OF 2017 (Arising out of SLP (Civil) Nos. 33363-33364 of 2016)
Decided On : 13-04-2017
Important Points
IMPORTANT POINT
LPA does not lie against an order of a Single Judge condoning delay in filing application u/s 34(3).
LPA does not lie against an order of a Single Judge condoning delay in filing application u/s 34(3).
Subject
Arbitration Law - Letters Patent Appeal
Act Referred
Headnote
(a) Arbitration and Conciliation Act, 1996 – Section 34(3) and 37, r/w clause 15 of the Letters Patent of High Court at Calcutta – Delay in filing appeal against arbitral award – Single judge condoning the same – Division Bench under clause 15 reversing the order – Held, Act 1996 being a special law and providing remedy of appeal u/s 37, would oust provision of general law like Letters Patent. (Par 10)
(2011) 8 SCC 333; (2004) 11 SCC 672; (2016) 9 SCC 524 – Relied upon
(1999) 2 CHN 107; (2000) 2 CHN 213 – Referred
(b) Arbitration and Conciliation Act, 1996 – Section 37 – Only an order of setting aside or refusing to set aside an arbitral award under Section 34(1) (c) appealable – Order condoning delay not appealable. (Para 13)
(c) Arbitration and Conciliation Act, 1996 – Section 34(3) and 37, r/w clause 15 of the Letters Patent of High Court at Calcutta – Single Judge condoning delay in filing application u/s 34(3) – Act does not provide any appeal thereagainst – LPA does not lie – Only remedy is appeal before Supreme court by way of SLP. (Para 14, 15)
Facts of the case:
The short question that arises for consideration in this appeal is: whether an intra-Court Letters Patent Appeal under clause 15 of the Letters Patent of High Court at Calcutta can be maintained against an order passed by the Single Judge on an application for condonation of delay filed along with the petition (for setting aside an Arbitration Award) under Section 34 of the Arbitration and Conciliation Act, 1996?
Finding of the Court:
LPA does not lie against an order of a Single Judge condoning delay in filing application u/s 34(3).
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Appellant contends the Act is a self-contained code excluding Letters Patent Appeals; Respondent argues the order was without jurisdiction and thus appealable. (Para 7 , 8 )
3. The Arbitration Act is a self-contained code, implying that general law procedures, including Letters Patent Appeals, are excluded unless specifically provided for in the Act. (Para 9 , 10 , 11 , 14 )
4. A Letters Patent Appeal is not maintainable against orders passed under the Arbitration and Conciliation Act, 1996, as it is a self-contained and exhaustive code. (Para 9 , 10 , 14 )
5. Appeal allowed; judgment of the Division Bench set aside; liberty granted to the Respondent to challenge the Single Judge's order through appropriate legal channels. (Para 16 , 18 )
6. Is a Letters Patent Appeal maintainable against an order passed under the Arbitration and Conciliation Act, 1996?
No. The Act is a self-contained and exhaustive code. Where a special Act sets out a self-contained code, the applicability of general law procedures, such as Letters Patent Appeals, is impliedly excluded. (Para 9 , 10 , 14 )
7. Does Section 37 of the Arbitration and Conciliation Act, 1996, allow an appeal against an order condoning delay in filing a Section 34 petition?
No. Section 37 provides a limited list of appealable orders. An order condoning delay in filing a petition under Section 34 is not listed as an appealable order under this section. (Para 12 , 13 )
8. Does an order passed without jurisdiction under the Arbitration Act open the door for a Letters Patent Appeal?
No. Even if a court wrongly exercises its discretion or commits a manifest error in condoning delay under Section 34(3), the order remains an exercise of jurisdiction under the Act, and LPA remains unavailable. (Para 11 , 14 )
JUDGMENT
A.M.KHANWILKAR, J.
1. The short question that arises for consideration in this appeal is: whether an intra-Court Letters Patent Appeal under clause 15 of the Letters Patent of High Court at Calcutta can be maintained against an order passed by the Single Judge on an application for condonation of delay filed along with the petition (for setting aside an Arbitration Award) under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’)?
2. Briefly stated, the Respondent being the lowest bidder was allotted a contract by the Appellant in respect of work styled as “Construction of Tsunami Reconstruction Project in A & N Islands. SH: Construction of 821 units of permanent shelters (single stories) including internal water supply sanitary installation & internal Electrification in the Island of Teressa.” The contract agreement was entered into between the parties on 5th October, 2006. According to the Appellant, the Respondent failed to adhere to the time frame for completion of the contract. As a result, a show cause notice was issued to the Respondent on 27th April, 2007 to show cause as to why the contract should not be rescinded by invoking clause 3 of the agreement. The Respondent submitted its response thereto on 8th May, 2007. Despite the dismal performance of the Respondent, the Appellant gave it one more opportunity to improve on the performance vide a letter dated 20th June, 2007. The Respondent, however, submitted its 12th revised completion plan dated 10th October, 2007. Since the Respondent failed to adhere to the extended time line and also miserably failed to maintain the quality and progress of work, the Appellant served it with a second show cause notice on 4th January, 2008. The Respondent replied to the said show cause notice on 1st February 2008. However, the explanation offered by the Respondent, in the perception of the Appellant, was found to be unsatisfactory and baseless. Hence, the Appellant rescinded the contract vide letter No. 57(12)/RE/TRP/Kamorata/07-08/638 dated 25th February, 2008.
3. The Respondent then invoked the arbitration clause in the agreement, pursuant to which the competent authority appointed an Arbitrator vide letter no. 23(6)/(1)ADG(SR)/TRP/08-09/469 dated 27th August, 2008. The arbitration hearing concluded on 27th March, 2014. An Award was published vide letter No.ARB/RKM/TRP/Case 005/2014-20 dated 27th October, 2014. The Appellant received a hard copy of the Award on 31st October, 2014, wherein the Arbitrator held that the rescindment order passed by the Appellant was illegal as time was not the essence of the contract and further directed the Appellant to pay the final bill submitted by the Respondent. Aggrieved, the Appellant filed a petition for setting aside the arbitral award before the District Court at Port Blair being Appeal No. 2 of 2015. The Respondent, on the other hand, filed an execution proceeding in relation to the self same Award before the High Court at Calcutta being EC Case No.734 of 2015. The Appellant then preferred an application in Appeal No.2 of 2015 before the District Court, for stay of the Award. The District Judge allowed the said application. That fact was brought to the notice of the High Court at Calcutta in execution proceedings initiated by the Respondent. The High Court vide order dated 15th September, 2015, disposed of the Execution petition filed by the Respondent and gave liberty to the Respondent to appear before the District Court and to resist the proceedings pending in that court.
4. The Respondent then filed objections in the proceedings before the District Court. According to the Respondent, the appeal before the District Court was not maintainable as the application under Section 9 of the Arbitration Act with regard to the subject matter of the arbitration proceedings was filed before the High Court at Calcutta. It was then contended that the District Court did not have territorial jurisdiction
