ADRS Case Analysis

ITI Ltd.

… APPELLANTS v.

SIEMENS PUBLIC COMMUNICATIONS NETWORK LTD. … RESPONDENTS Citation: (2002) 5 SCC 510

Case Analysis ADRS Internal 1

11010124030 Div. A Medha Gupta

Facts

The facts of the case are given hereunder: 1. Arbitral Tribunal made an interim order against which an appeal was filed before the City Civil Jude under Section 37(2) (b) of the Arbitration and Conciliation Act. The Civil Judge dismissed the appeal

Medha Gupta

2. Against this dismissal, the appellant preferred the present appeal directly before the Supreme Court. 3. Submitted on behalf of the appellants: a. Right of second appeal is specifically taken away under Section 37(2) of the Arbitration Act. b. Thus, by implication, it should be held that a revision is also not maintainable under Section 115 of the Act. c. Section 5 of the Act presents a bar against judicial intervention by any judicial authority unless the same is specifically provide under Part I of the Act. d. A revision is not specifically provided for and under the Civil Procedure Code it being made applicable to proceedings arising under the Act, a revision to the High Court doesn’t lie. e. Thus, only remedy before the appellants was to approach the Supreme Court by way of appeal. f.

Further contended that Supreme Court has jurisdiction to entertain the appeal, thus appeal should not be rejected on grounds that remedy by way of revision before High Court is available.

4. Appeal dismissed.

Issues

I.

Whether a revision petition under Section 115 of the Code of Civil Procedure lies to the High Court as against an order made by a civil court in an appeal preferred under Section 37 of the Arbitration and Conciliation Act, 1996, when a second appeal is statutorily barred under the Act? 2|Page

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II.

Whether, when the Code is not specifically made available, it can be said that a right of revision before the High Court would still be available to an aggrieved party?

III.

Whether, on the facts and circumstances of this case, such a remedy by way of revision is an alternate and efficacious remedy?

Rules

1. Section 5, Arbitration and Conciliation Act, 1996 Extent of judicial intervention: - Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. 2. Section 37, Arbitration and Conciliation Act, 1996 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. Granting or refusing to grant any measure under Section 9 b. Setting aside or refusing to set aside an arbitral award under Section 34 (2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal – a. Accepting the plea referred 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. 3. Section 115, Civil Procedure Code, 1908 (1) The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears – a. To have exercised a jurisdiction not vested in it by law; or b. To have failed to exercise a jurisdiction so vested, or c. To have acted in the exercise of its jurisdiction illegally or with material irregularity, 3|Page

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The High Court may make sure order in the case as it thinks fit: (Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where the order, if it had been made in favor of the party applying for revision, would have finally disposed of the suit or other proceedings) (2) The High Court shall not, under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to any Court subordinate thereto (3) A revision shall not operate as a stay of suit or other proceedings before the Court except where such suit or other proceedings is stayed by the High Court. Explanation – In this section, the expression “any case which has been decided” includes any order made, or any order deciding an issue in the course of the suit or proceedings

Analysis

The present case is based on the overlap between the Civil Procedure Code and the Arbitration and Conciliation Act. The contentions presented by the appellants and respondents before the Hon’ble Supreme Court of India are given hereunder: Contentions: Appellants Counsel on behalf of the appellants contended that a second appeal was specifically barred under Section 37(2) of the Arbitration and Conciliation Act, 1996 (hereinafter called the Act). He argued that it could be extrapolated to read that a revision petition was also not maintainable under Section 115 of the Civil Procedure Code, 1906 (hereinafter called the Code).

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Counsel further pontificated that under Section 5 of the Act, there is an express bar against judicial intervention by any judicial authority unless the same has been specifically provided for under Part I of the Act. Thus, as a revision doesn’t lie before the High Court and the Code is not specifically applicable to these proceedings, the only remedy available before the appellants was to move the Supreme Court in appeal. In order to substantiate his point, Counsel relied upon the decision in R.M.A.R.A Adaikappa Chettiar v. R. Chandrasekhara Thevar1and two other Supreme Court judgements in the cases of Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat2 and Central Coal Fields Ltd. V. Jaiswal Coal Co.3 Contentions: Respondents Counsel on behalf of the Respondents countered the appellants’ contentions on the grounds that under Section 37 of the Act an appeal is provided to a Civil Court as defined under Section 2€ of the Act. Though there is no specific mention of the applicability of the Code to these proceedings, provided for under the Act, Section 37 doesn’t expressly exclude the applicability of the Code either. In the event of such legislative ambiguity, it follows that the Code would be attracted as far as any proceedings before any Civil Code within the territory of India. Counsel argued that the question of availability of an alternate remedy in the form of Revision before the High Court would be no more res integra because the same is concluded in an order issued by the Supreme Court.4 Issues: Reasoning

1 R.M.A.R.A Adaikappa Chettiar v. R. Chandrasekhara Thevar, AIR 1948 PC 12 2 Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat, 2 (1969) 2 SCC 74 3 Central Coal Fields Ltd. V. Jaiswal Coal Co., 1980 Supp SCC 471 4 Nirma Ltd. V. Lurgi Lentjes Energietechnik GMBH, 4 (2002) 5 SCC 520 5|Page

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The Court held that the reliance made by the appellants on the case of Adaikappa Chettiar5 was misplaced as it doesn’t support the contentions made by them. The Privy Council therein, ruled that when an appeal lies from Section 96 of the Code, the High Court doesn’t have the jurisdiction to entertain an application for revision under Section 115. The appellants’ reliance on this case does not in any manner or form support their contention of the exclusion of the Code in appeals from Arbitral Proceedings. The judgment is a clear demarcation between the right to appeal and the right to revision. However, only in the event when both these rights exist simultaneously and ambiguity as to their exercise is de rigueur. The judgment rendered in Shankar Ramchandra Abhyankar6 clarified that the nature of revision is de facto that of an appeal. Counsel for appellants argued that as the nature of revision was that of an appeal for all intents and purposes, an express bar on a second appeal as under Section 37 of the Act, would also extend its purview to revision. The Court observed that this case doesn’t apply to the facts and circumstances of the present appeal. In Abhyankar’s7 case the trial court had granted a decree for possession of certain rooms in the petition scheduled premises, which order of eviction was confirmed by the appellate court on grounds of equity. Against the appellate court’s judgment, the aggrieved party filed a writ petition under Article 226 and 227 of the Constitution of India, challenging the appellate court’s order which was confirmed in revision. Based on these facts, the Hon’ble Supreme Court held that the writ petition should not have been entertained by the High Court when parties had already decided to opt for the remedy of revision. The Court further expounded that in the event where two remedies are available and one is chosen and exhausted, it would not be apropos to entertain a second proceeding in respect of the same impugned order. The decision regarding the parallel natures of the right to appeal and the right to revision were given in light of these facts and circumstances.

5 R.M.A.R.A Adaikappa Chettiar v. R. Chandrasekhara Thevar, AIR 1948 PC 12 6 Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat, 2 (1969) 2 SCC 74 7 Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat, 2 (1969) 2 SCC 74 6|Page

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In the present case, there is no scenario wherein parallel remedies are existent. Thus, the above mentioned case cannot be applied satisfactorily. Dealing with the crux of the issues, whether when a second appeal is statutorily barred under the Act and when the Code is not specifically made applicable, can it be said that a right of revision before the High Court would still be available, the Court considered the following: In the case of Nirma Ltd.8 the Supreme Court dismissed the SLP held that: “In our opinion, an efficacious alternate remedy is available to the petitioner by way of filing a revision in the High Court under Section 115 of the Code of Civil Procedure. Merely because a second appeal against an appellate order is barred by the provisions of sub-section (3) of the Section 37, the remedy of revision does not cease to be available to the petition, for the City Civil Court deciding an appeal under sub-section (2) of Section 37 remains a court subordinate to the High Court within the meaning of Section 115 CPC” The Counsel for Appellants contended that the above reasoned judgment was bad in law as it erroneously relied upon the judgment in the case of Shyam Sunder Agarwal & Co. v. Union of India,9 wherein the Arbitration Act of 1940 was applicable. The Code was specifically made applicable under this Act. However, the Act of 1996 doesn’t follow this legislative trend, making this judgment inapplicable in the present case. The Court disagreed with this submission. While the present Act of 1996 doesn’t specifically provide for the Code, there is no express bar to its applicability. Based on the above-mentioned reasoning it cannot be inferred that the Code is not applicable. It follows then, that the order made in the case of Nirma Ltd.10 is a point in fact as regards the present case. The Court further reasons that the view it has taken in multiple proceedings before it furthers: 8 Nirma Ltd. V. Lurgi Lentjes Energietechnik GMBH, 4 (2002) 5 SCC 520 9 Shyam Sunder Agarwal & Co. v. Union of India, (1996) 2 SCC 132 10 Nirma Ltd. V. Lurgi Lentjes Energietechnik GMBH, 4 (2002) 5 SCC 520 7|Page

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“…the jurisdiction of the civil court to which a right to decide a lis between the parties has been conferred can only be taken by a statute in specific terms and such exclusion of right cannot be easily inferred because there is always a strong presumption that the civil courts have the jurisdiction to decide all questions of a civil nature, therefore if at all there has to be an inference the same should be in favor of the jurisdiction of the court rather than the exclusion of such jurisdiction…” In the present case, there is no express exclusion of the jurisdiction conferred on the civil courts under the Code, except to the extent of Section 37(2). Thus, at no point can a justifiable inference be drawn that the Act has not provided for the applicability of the Code, or that the Code then becomes applicable due to the lack of express provision. This issue has further been pondered and determined in Bhatia International v. Bulk Trading S.A11 wherein the Supreme Court held: “While examine a particular provision of a statute to find out whether the jurisdiction of a court is ousted or not, the principle of universal application is that ordinarily the jurisdiction may not be ousted unless the very statutory provision explicitly indicates or even by inferential conclusion the court arrives at the same when such a conclusion the only conclusion.” As regards the contention based on Section 5, the Court held that as an appeal lies before a civil court, the provision of the Code would be attracted as far as the governance of the proceedings is concerned. Thus, the remedy of Revision would also become applicable as it is neither expressly barred, nor is the jurisdiction of the Civil Court or the High Court specifically ousted in the statute. That being the case, the bar under Section 5 would not be attracted, as the appellate power of the Civil Court and the Revisional power of the High Court are governed under the Code. Dharmadhikari, J.: Concurring Held, the Code grants power to High Court over all subordinate courts within its territorial jurisdiction, in a supervisory capacity. The power of revision under Section 115 is of supervisory 11 Bhatia International v. Bulk Trading S.A, 6 (2002) 4 SCC 105 8|Page

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nature and cannot be inferred as being ousted by provision of any Act unless expressly stated therein. Section 37 of the Act takes away right of second appeal expressly, but remains silent on right to revision, giving jurisprudential credence to its existence. In National Telephone Co.12 case it was observed: “When a question is stated to be referred to an established court without more, it in my opinion, imports that the ordinary incidents of the procedure of that court are to attach, and also that any general right of appeal from its decision likewise attaches.”

Conclusion

In the present case, the Court has exercised extreme prudence in making its determinations. I believe that the Court has reached the right conclusions, in keeping with both the procedural and substantive questions raised. The right to revision has been provided for in the Code, as an alternate remedy to the right of appeal. Had the two remedies been synonymous the legislature would not have made separate parameters for the same. Hence, the contentions of the appellants were ill-founded. Furthermore, the exclusion of any judicial redressal remedy should be exclusively barred under statute or expressly made unavailable before it can be considered non-existent, in the interests of justice. Any such inference, should it be accepted, would establish a severely hampering precedent for successive litigants, who wish to avail the wisdom of the Courts. In that respect, this judgment is progressive. Lastly, the Arbitration Act is still developing jurisprudence as ADR in Indian litigation is a relatively new concept and is only just appealing to litigating parties. It will take some time and consideration to demarcate the extent to which it is concomitant to the Code of Civil Procedure. 12 National Telephone Co. Ltd. Postmaster General, 1913 AC 546 9|Page

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Thus, it is imperative that it should not be interpreted in too narrow confines. However, a liberal interpretation is also difficult as it would challenge the efficacy of arbitral proceedings. In light of this situation, I believe this judgment strikes the right balance between the sanctity of the Code and the innovative capacity of the Arbitration Act.

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